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President Barack Obama touted the steps taken and legislation passed by his administration to bolster small business growth while speaking at a manufacturing plant in Rhode Island recently.

So far, the Obama administration has signed 16 tax breaks into law for small businesses as part of the Recovery Act and subsequent legislation, according to a press release. The tax cuts could be great news for those starting an LLC or corporation.

The legislation includes provisions such as a small business healthcare tax credit and a tax credit for hiring unemployed workers. According to the White House, the legislation will also continue to lend support to small businesses struggling to access the credit they need by creating a new $30 billion small business lending fund, extending Recovery Act provisions such as raising SBA loan guarantees and eliminating fees, and doubling the maximum size of most SBA loans.

Obama stated that 3,600 small businesses have received more than $1.4 billion worth of new loans since the last eight tax cuts were signed into law in September, CNN reported.

The president's visit to the Rhode Island business, American Cord & Webbing in Woonsocket, Rhode Island, came eight days before the mid-term congressional elections in which Republicans are expected to pick up seats in both the House of Representatives and the Senate.

For women hoping to form an LLC or start a corporation, the White House recently announced that they will be putting special energy into promoting economic expansion and job growth for women.

The Obama administration announced this week that the U.S. Small Business Administration loans are three to five times more likely to go to women and minorities than traditional small business loans.

Karen Mills, SBA Administrator, said in a press release that women-owned businesses are one of the fastest growing sectors in the U.S. economy and, even with the troubled economy over the last few years, these businesses have been "one of the key job creation engines in communities across the country."

According to a White House press release, more than 12,000 SBA Recovery Act loans have gone to women-owned small businesses, giving them $3 billion in lending support to grow their businesses and create jobs.

Women make up nearly 50 percent of the workforce. In nearly two-thirds of families led by single mothers or two parents, women are either the primary or co-breadwinner, according to the White House. In addition, reliance on a woman's income has increased as many jobs traditionally held by men have been lost during the recession.

The SBA will begin implementation of a women-owned small business contracting program in early 2011.

It seems that those involved in small businesses across the country aren't content with just starting an LLC or forming a company. Some are looking to also start a career in government.

The National Federation of Independent Business interviewed more than 200 candidates and found that the next Congress and state legislatures could have more small business owners than ever before. More than half of the candidates for Congress this year are small business owners or have some direct tie to small business.

Dan Danner, NFIB's president and CEO, told Portfolio.com that many small business owners have been frustrated by policies from Washington and, as a result, think they have to run for office in order to protect their businesses, their livelihood and their futures.

The NFIB expects Congress to extend all the tax cuts for a year or two, but the federal deficit, which totaled $1.3 trillion in fiscal 2010, is "kind of personal" for small business owners, according to Danner.

Jennifer Duffy, senior editor for the Cook Political Report, told CNN that she sees that small business owners are disheartened.

"They don't feel like Congress, specifically, and the government, generally, gets what they need, especially in a difficult economy,' Duffy said.

The newest round of small business tax cuts, signed into law in September, allow 4.5 million small businesses and individuals to increase the amount of investments they can write off, which is good news for those hoping to form an LLC or start a corporation.

With the new legislation, more startup expenses can be deducted, explained BusinessWeek contributor Karen Klein. Those who opened up a business in 2010 or plan to do so can now deduct up to $10,000 in startup expenses. Previously, the maximum deduction was $5,000.

In addition, companies can deduct as much as $500,000 in expenses for machinery, furniture and computers. Entrepreneurs who purchase new equipment are able to write off 50 percent of that cost this year, rather than watching the full cost depreciate over time.

According to the White House Press Secretary, Robert Gibbs, the legislation will continue to lend support to small businesses struggling to access the credit they need by creating a new $30 billion Small Business Lending Fund, extending Recovery Act provisions such as raising Small Business Administration loan guarantees and eliminating fees and doubling the maximum size of most SBA loans.

Hiring employees seems like a pretty simple step for anybody who has formed an LLC or started a business. After all, once you've been through all the paperwork and legal issues associated with forming an LLC, how hard could hiring be? Well, there are a few little rules that are important to know before a business owner starts thinking about adding employees to the payroll.

The most important rule is one that all employers should know: United States federal law prohibits employers from discriminating against job candidates on the basis of race, color, national origin, religion, sex, physical handicap or age. In some states or localities additional characteristics, such as sexual orientation, may also be prohibited from entering into the hiring equation. In some high-profile court cases, companies have been taken to trial for hiring only attractive female employees. Even if a business owner has no intention of being discriminatory in his or her hiring, he or she must still be careful to consider all applicants and avoid any actions that could be considered discriminatory.

To avoid any confusion, hiring managers at businesses and LLCs should stick to job interview questions that focus specifically on the applicant's ability to successfully perform the duties required for the job to which he or she is applying.

Both employers and employees will benefit when everyone is sensitive to discriminatory issues.

Choosing the right business entity is an important decision for entrepreneurs considering forming an LLC, and an attorney writing at VentureBeat recommends considering all the possibilities to avoid future legal issues.

The corporation and LLC offer liability protection for owners in the event of a lawsuit. However, the LLC is relatively new, and Curtis Smolar writes that there isn’t as much legal precedence for LLCs. Forgetting a key aspect of business formation could create problems in the event of a legal proceeding.

For business owners choosing an LLC, Smolar recommends having a professional assemble the required paperwork and contracts, even if it costs a little more.

Another important aspect to consider when forming a business is termination agreements. Smolar recalled one of his clients with two partners. One partner wanted to quit the business; the other didn’t. Since there was no termination agreement, the situation created legal problems.

Having all the issues covered with a solid contract can also help with the processes of selling a business. Owner-financing is increasingly being used to entice potential buyers, and having a clear termination agreement and contract with all partners and stakeholders will assure all options are available.

Following the legal procedures required when forming an LLC means filing the appropriate paperwork, obtaining business insurance and tracking income and expenses. But if there are employees of the new venture, business owners should make sure they obtain workers’ compensation coverage.

Required in all 50 states, workers’ compensation insurance reimburses an employee for an on-the-job injury. Each state differs on exemptions based on the number of employees, according to FindLaw.com. Jason Beahm writes that some states, such as California, will actually require workers’ compensation for a self-employed worker even if there are no employees, depending on the occupation.

Occupations are also classified differently, with much higher rates for riskier jobs, such as construction, while lower rates are applied for employees who work in an office.

Since worker’s compensation pays an injured employee regardless of fault, business owners can take a few steps to avoid rate increases.

"An employee can be solely responsible for an accident but still entitled to recovery workers’ compensation benefits," Beahm writes. "Therefore, it is certainly worthwhile to have an ongoing safety training program in place to help prevent accidents."

According to the Massachusetts labor law firm Kantrovitz & Associates, more than 15,000 workers are injured on the job every day.

Every entrepreneur creating an LLC dreads an IRS visit, but a new video on the IRS website helps small businesses prepare and organize for a possible audit.

The IRS has created a convenient and easy-to-use video, Your Guide to an IRS Audit, that business owners can view at any time, writes Laura Strachan at FindLaw.com.

The video addresses critical concerns business owners might have, such as preparation of tax records, what to expect after an initial IRS visit, payment options and when to consider legal representation. The video also helps business owners by explaining the appeals process.

Strachan recommends maintaining well-organized and detailed financial records in the event a business is audited.

The chances of a small business being audited by the IRS are increasing. Between 2005 and 2007, the number of small business audits rose by 41 percent, while during the same period the number of audits of big businesses actually decreased by 40 percent.

Caleb Groos at FindLaw.com recommends business owners keep bank statements, expense receipts, auto records, property expenses and register receipts on hand in the event of an audit.

The U.S. Small Business Administration is putting an emphasis on making capital accessible to small businesses and entrepreneurs forming an LLC in order to stimulate economic recovery.

Karen Mills, head of the SBA, told USA Today that her agency will address the "Three Cs" – Capital, Counseling and Contracting – to help the country recover from the economic recession.

"Small businesses are really the engine in the economy," she said. "[They produce about] 65 percent of net job growth. Half of the people who work in this country own or work for a small business. Right now, the government’s role is to give them more support, more momentum."

Mills said small business owners are most worried about having "stable access to capital," and proposed legislation could make more financing available once Congress reconvenes debate over the bill. She said the 2009 small business stimulus bill was a success, but that the money ran out last spring and another injection of capital is needed.

Mills has extensive experience in startups and small business, including industrial manufacturing in the Midwest, women-owned venture capital investments in New York and ship building in New England.

Vice President Joe Biden has said the proposed tax changes in 2011 will keep taxes low for 98 percent of Americans, and believes a small business stimulus bill will help many entrepreneurs forming an LLC.

Visiting a Washington D.C. pizzeria this week, Biden reinforced President Barack Obama’s commitment to keeping taxes low for small businesses. Over lunch at Pete’s New Haven Style Apizza, Biden noted that extending the Bush-era tax cuts for the wealthiest 2 percent of Americans would give $300,000 per year to families already earning more than $8 million annually.

Obama’s plan would only increase taxes on families earning more than $250,000 per year, which Biden pointed out is fewer than 2 percent of U.S. households.

Biden said the tax cuts should go to families and small businesses struggling to recover from the recession.

The Bush-era tax cuts are set to expire at the end of 2010. Coalitions of some of the largest companies in the U.S., including Walmart and Lockheed Martin, and the U.S. Chamber of Commerce will spend more than $75 million on the November elections in an effort to keep the tax cuts for the wealthiest Americans.

Entrepreneurs forming an LLC will want to consider new tax credits available through recent healthcare reform in order to minimize expenses.

The new requirements are aimed at making healthcare coverage affordable for smaller businesses. A report by Families USA and the Small Business Majority states that only 46 percent of U.S. companies with fewer than 10 employees provide healthcare.

Much of this lack of coverage is due to the difference in purchasing power of larger companies that are able to lock in lower group rates.

But the new tax credits should offset the gap by offering a 35-percent tax credit for companies with fewer than 10 employees and average annual incomes of $25,000. Larger companies with fewer than 25 employees each earning less than $50,000 annually can avail of a partial tax credit.

Garry Apelian owns a Chicago-area carpet company. He told the Chicago Tribune that high healthcare costs have kept him from hiring new employees, even when business is good.

More creative strategies to manage healthcare costs are being sought by business owners. A recent University of Michigan study found that long-term employee wellness programs provide considerable healthcare savings for employers.

Entrepreneurs forming an LLC and using a fictitious business name should watch out for disreputable companies offering to renew a business name filing for excessive fees.

A Victorville, California, business owner thought twice before sending in the $125 fee to an official-looking company that threatened his LLC status would expire, reported the Victorville Daily Press.

The California attorney general said the company appears to be a scam, and that the state filed suit against several similar companies last year that were using stamps and letterhead that appeared official.

The Victorville business owner said he became suspicious because in previous years he simply had to file an inexpensive certificate with the city and publish the name in the newspaper.

With a slowly-recovering economy, the number of scams nationwide is increasing, reports the Chicago Tribune.

Some scams involve switching shipping account numbers, allowing tens of thousands of dollars in shipping costs to be billed to an unsuspecting business owner.

The scams are usually using the stolen shipping accounts to pay for mass mail that attempts to cheat recipients out of personal information or money.

The possibility of the Bush-era tax cuts expiring should not deter entrepreneurs from forming an LLC because the tax increase is likely to only affect 2.5 percent of the Americans reporting business income.

Although it’s impossible to define how many are “small businesses,” Howard Gleckman at the Tax Policy Center writes that 36 million Americans report business income every year, and only 900,000 of them would face increased taxes if the rates go up.

He says the average business income is $40,000, meaning these earners would be “miles from the top two tax brackets” of $200,000 (or $250,000 for couples).

Gleckman notes that the half-million people earning more than $700,000 are mostly investors or medical or legal professionals.

“Do they fit your image of a small business owner?” Gleckman asks. “These are the people – not the mom-and-pop business owners – who would be hit by the expiration of the top bracket tax cuts.”

BusinessWeek reports that a family earning $300,000 per year would pay just $3,995 more in taxes, and that while an increase may have some effect, it won’t be “crippling.”

To help entrepreneurs gain access to capital to start an LLC, the CEO of the nation’s credit union association is calling on the U.S. Congress to allow credit unions to do more small business lending.

Credit unions are currently capped by federal law from lending more than 12.25 percent of their assets to small businesses, writes Bill Cheney, CEO of the Credit Union National Association, in the Huffington Post. A proposed bill in the U.S. House of Representatives would raise that cap to 27.5 percent, and, according to Cheney, “create more than 100,000 new jobs, and inject $10 billion into the economy, both at no cost to taxpayers.”

He notes that during the recession of 2008 and 2009, business lending at credit unions actually increased, and blames big banks for holding up legislation that could open up credit unions further.

“Unless Congress grants its permission, credit union business lending will have to slow down – and that does nothing to help struggling small firms.”

President Barack Obama supports raising the lending cap limit for credit unions, which could provide not only financing for debt or real estate purchases, but also startup capital for new companies.

Claims that the estate tax could hurt small businesses or discourage entrepreneurs from starting an LLC don’t reflect reality, writes small business owner Jim Amaral in Arkansas’s Baxter Bulletin.

With business owners earning less than $85,000 accounting for 95 percent of all small business revenues, Amaral claims the estate tax would really only apply to a very small portion of the wealthy.

“The estate tax is a boon to small businesses,” Amaral writes. “The estate tax revenue that comes from extremely wealthy families can fund things like small business and student loans so future generations of entrepreneurs have opportunities to secure their own prosperity.”

Amaral points out that estate tax revenues also help pay for infrastructure that many small businesses rely on.

An estate tax requires descendants to pay a one-time tax on property or assets inherited from a deceased relative, including family-owned businesses. The 2010 estate tax was repealed, but is set to return next year.

However, instead of returning to 10-year-old tax rates in 2011, the U.S. Senate is debating the Responsible Estate Tax Act, which would provide a $3.5 million exception per spouse, while taxing larger inheritances at 45 to 65 percent.

A new law has been signed by the governor of Massachusetts that could reduce healthcare costs by as much as 12 percent for smaller businesses, corporations and LLCs.

The new state law allows small businesses to qualify for lower healthcare premiums through cooperatives, opening up lower group rates typically only obtained by larger corporations.

Governor Deval Patrick said the legislation was a “milestone” that would help keep costs affordable for companies, while assuring coverage was accessible for individuals.

“Small businesses have never had a seat at the table with big business, government, insurers or providers, and consequently have been hit with unaffordable and unfair health insurance premium increases,” said the president of the Massachusetts Retailers Association, Jon Hurst.

Some companies seeking to reduce healthcare costs are doing internal audits and hiring consulting firms to look for employees that are claiming ineligible dependents, reported The Denver Post.

The CEO of one auditing firm told the paper that it has seen companies where 12 percent of all dependents were actually ineligible for healthcare coverage on the company plan.

Ohio State Auditor and Republican candidate for lieutenant governor Mary Taylor said that the state government needed to take steps to make it easier for local entrepreneurs to form an LLC and run their businesses successfully, the Business Journal reports.

Taylor said that many steps needed to be taken in order to improve the state’s business climate. According to the paper, she focused on the need to "common-sense regulations" that would eliminate red tape for small businesses and improve the state’s business tax policies to keep from driving employers out of Ohio.

She also added that the state needed to become more modern and efficient in the ways it works to provide information to local business owners. By taking this step, entrepreneurs could take advantage of the existing training and development programs that they could be eligible for.

The state has not traditionally been very business-friendly. According to the Columbus Dispatch, Indiana Governor Mitch Daniels recently said that he enjoyed competing against Ohio for business "because it’s easy" and "fun."

Los Angeles legislators are taking new steps to the make sure the city is attractive to those looking to start an LLC.

Officials have now unanimously passed a pair of initiatives that give new large companies a three-year exemption from the city’s existing business tax and gives new small businesses an exemption through the end of 2012.

"This tax holiday will allow businesses that are starting out in Los Angeles to get on their feet," City Council President Eric Garcetti told KPCC radio. "We are going to waive 100 percent of their gross receipts or business tax, and allow them to create jobs right here in Los Angeles where we need in the midst of this recession to put people back to work.

Once the bill expires, the exemption will drop to two years, and will only apply for small businesses that earn less than $500,000 per year.

City business leaders approved the move. The Los Angeles Times reports that the local Valley Industry and Commerce Association praised officials for "listening to the business community’s concerns."

A new study from the Ewing Marion Kauffman Foundation says that lawmakers looking to encourage business formation should work to streamline the process of business creation instead of focusing down the line.

According to the study, while entrepreneurs are willing to take risks in order to receive a significant return, they are also more conservative when it comes to saving for the future and their retirement.

Because of those results, researchers said that any legislation created to encourage more entrepreneurs to file an LLC should work to make it easier for them to see their potential financial return. To do that, researchers say that lawmakers should focus on making filing regulations and processes easier to understand, which would allow entrepreneurs more time to do what they do best – running the company.

The finding that small business owners are very aware of trying to save for retirement is surprising given the results of a recent study by the U.S. Small Business Administration. It found that just 36 percent of business owners had IRAs, and just one-third of them had contributed to those funds in the most recent year.

Volusia County officials have approved funding for a business incubator at Daytona Beach International Airport, which will provide low-cost office space and mentoring for those who start an LLC, the Daytona Beach News-Journal reports.

The program will work to nurture and develop small businesses in the area, which will rent office space at reduced costs and learn from the incubator’s staff members and their various industry contacts.

"We’re real excited about this partnership," County Manager Jim Dinneen told the paper. "I don’t think there’s any downside to this. I think it really affects the county in a positive way."

The incubator project will be run by the University of Central Florida, which will receive a total of $775,000 in funding from county officials. The county will also have to pay for the facility to be renovated, which it estimates will cost approximately $1.2 million.

Officials expect it to be open for business sometime next year.

The Daytona Beach location will actually be the ninth for UCF. The school’s business incubation program says that since it began in 1999, it has helped local entrepreneurs create more than 140 companies – which now account for more than 1,600 jobs.