IncFile.com - Business Incorporation Solutions

As more laid-off workers move into the entrepreneurial realm, business incorporation is becoming a more prevalent topic and makes identifying the right time and reasons to incorporate critical.

One key reason to incorporate is when an entrepreneur has significant personal assets to protect, such as a home, a car or substantial savings in his or her bank account. Incorporating a venture will ensure that personal assets remain untouched in case of a lawsuit.

Additionally, when a business begins to add partners or hire employees, it is prime time for incorporation. Expansion is exciting, but it should be done with risk management in mind, Nina Kaufman writes for Fox Business.

For example, Kaufman recounts how Ann Siegle of Tria Marketing and Design handled the process.

"Early in her serial entrepreneurship, when she added employees to her home-based design firm, she made the move from sole proprietorship to S Corp, which offers some tax benefits a regular corporation doesn't. Upon going into a second business with partners, Siegle sought the structure and liability protection of a limited liability company," Kaufman writes.

When a business is considering incorporating, it is a good idea to contact an attorney who has substantial experience with the process.

For companies looking to start an LLC, financing is a critical element that often requires rounds of private funding as part of the search for investors.

Recently, Lincoln Renewable Energy, a developer of U.S. solar and wind projects, closed a $14 million round of private funding, thanks to investments led by Austin Investments, private investors and LRE management and founding partners.

"We are delighted to welcome an investor with the track record and reputation of Austin Ventures and look forward to the tremendous value they can add to a high-growth company such as LRE," said Declan Flanagan, chief executive officer of Lincoln Renewable Energy. "With the current round of funding closed, we are well positioned to move our diverse and growing pipeline of solar PV projects towards construction."

LRE plans to use the capital to benefit projects currently under development in 11 states across the U.S., as well as continue to develop utility-scale solar photovoltaic projects.

The solar industry is expected to take off in 2011. According to a recent survey from the Solar Foundation, over the next 12 months, more than 50 percent of solar firms expect to add jobs.

As the nation's soldiers return from war and begin to set up shop, they will now be required to provide documentation to be awarded the contracts and funds critical to forming an llc corporation.

The new provision requires that veterans submit an application verifying their businesses as owned and controlled by veterans, service-disabled veterans or eligible surviving spouses to qualify as a small business priority for some Department of Veterans Affairs contracts.

"VA is committed to doing business with as well as supporting and protecting veteran-owned small businesses," said Secretary of Veterans Affairs Eric K. Shinseki. "Although the verification process may initially be a challenge to some small business owners and to VA, it's a necessary step to eliminate misrepresentation by firms trying to receive contracts that should go to service-disabled and other Veteran-owned vendors."

Between December 10 and 11, VA sent notices to more than 13,000 businesses via email regarding the new changes.

The website VetBiz.gov, operated by VA, offers veterans resources and advice for operating a small business. Users can search for businesses or create their own profiles.

One of the best ways to obtain favorable tax advantages for businesses is by incorporating the company. There are a variety of options available for business owners with different tax implications for each.

Writing for Business Insider, Deborah Sweeney, says that if business owners fail to incorporate their companies, the IRS will label it as a sole proprietorship. As a result, when filing taxes for businesses that have not been incorporated, individuals will need to file a Schedule C tax return, which is the second most audited form.

The tax benefits vary depending on how a business decides to incorporate.

"While all business structures are more tax friendly than a sole proprietorship, not all structures are as good as an S Corporation," Sweeney wrote for the publication. "In general, the corporation is typically the most tax friendly structure, but provides some inflexibility in operating. The LLC provides the most operation flexibility, but can result in some unfavorable tax results."

States around the country have been setting up ways for corporations to get tax advantages for filing as an LLC. The Douglas Dispatch reports that Republicans in Arizona's legislature have been pushing to decrease property taxes for corporations from 21 to 18 percent.

As 2011 comes to an end, many businesses are trying to tie up loose ends and look ahead to the new year.

According to the CEO and co-founder of CorpNet, Nellie Akalp, entreprenuers that have formed an LLC for a previous venture should consider closing the defunct company before the start of 2011. In an article for Mashable.com, she writes that business owners need to file a formal termination of the LLC or corporation, or risk paying fees associated with it.

The end of the year is also a good time to incorporate a business.

"If a person is thinking about incorporating a business they should do so before the start of 2011. Because January is such a busy time for incorporation, business owners would be wise to try to form an LLC before the start of the month," Akalp wrote. "Be aware that January is the absolute busiest time of the year at your secretary of state’s office, so by waiting until January, you will be at the mercy of a long backlog."

In an earlier article for the website, Akalp wrote that protecting a busniesses name was essential for success. She writes that registering a brand as a trademark will help protect others from taking your name without authorization. 

A fuel conversion company recently made headlines when it announced that it received funding from one of the most well known venture capital companies in the world.

In a statement, LS9 announced that they had received $30 million in capital from BlackRock as it completes its latest round of funding. In addition to BlackRock, other investors included Flagship Ventures, Khosla Ventures, Lightspeed Venture Partners, CCTV Investments and the venture arm of Chevron Technology Ventures – all have previously given funding to the company.

Over the years, LS9 has been working to develop a technology that creates a one-step fermentation process in order to convert plant-based ingredients into "a diverse portfolio of fuel and chemical products."

"We are very pleased that this outstanding group of new and existing investors has demonstrated their commitment to LS9’s mission to bring renewable chemical and fuel products to market,"said Ed Dineen, newly appointed president and chief executive officer of LS9. "In particular with BlackRock, the world’s largest asset manager, joining our investor group, and given their increasing focus on renewables, we believe this will benefit LS9 in a number of ways."

LS9 made other headlines recently when it announced the hiring of Edward Dineen as CEO and president. 

After a lengthy period of planning, troubleshooting and organizing, small business owners must prepare to attain venture capital investments. Though success rates vary for each case, the path is often similar when it comes to attaining funding. By using these steps, an entrepreneur can increase his or her opportunities at acquiring the desired capital.

A clear breakdown of all risk – both financial and personal – should be presented. Lenders do not want any irregularities when it comes to finances and how the figures project over certain periods of time. The entrepreneur should offer any and all information regarding reimbursement of the initial investment and sound projections of potential revenue, according to Mashable.com.

It is imperative that as a new small business owner, the entrepreneur remains up to date regarding market trends and how those forces will influence a new business. Those seeking lending should have a robust plan for surviving the initial months in the market, writes Michelle Hammond of StartUpSmart.com.

During investment negotiations, the entrepreneur should avoid constricting contract requests which could turn off possible investors. However, they should insure themselves financially, protecting against agreements that unnecessary penalize oneself should the business flounder. Too much aggressiveness during contract talks, should one get that far, can dissuade investors, Hammond writes.

Every investment case is different, however, utilizing these tips will help provide an outline. Following these ideas when being vetted by lenders can be the difference between just an idea and an established business.

Most entrepreneurs will face a period of lean profits. There will be a time when business will not be as consistent as earlier months or years. However, it is during this period when small business owners should enhance their customer loyalty programs.

With the amount of options available to consumers today, customer loyalty is far from certain. As a result, entrepreneurs should utilize numerous avenues to keep constant communication lines open to customers. Social media, e-newsletters or in-store suggestion boxes all allow small business owners to have open dialogue with customers, writes Jason Teichman of Register.com.

Additionally, marketing campaigns should target both existing and new customers. The former should not receive the majority of targeted advertising, but heightening their brand awareness is key during less profitable times.

AllBusiness.com writes that customer loyalty programs can provide immediate results as entrepreneurs increase the incentive for customers to return.

David Alcorn of Return on Behavior magazine noted that a 2 percent increase in returning customers is congruent to a 10 percent cut in costs. Additionally, Alcorn stated that small businesses lose 10 percent of their customer base annually, driving the need for greater customer loyalty programs.

Whether enhancing their practices or finding new customers, work-at-home moms will have the chance to increase revenue in the new year if they adhere to the following trends.

The use of social media will play a vital role in moms gaining more exposure for their small business, writes Lisa Druxman for Entrepreneur.com. The low-cost but potentially high reward should be a no-brainer avenue of approach in 2011. Social media can be used at home or on the go, always allowing moms to get their message out.

Green is in, Druxman says. With more mothers open to implementing green and other conservation ideas, moms can gain access to a growing field by using and/or advertising environmentally friendly products.

Moms taking over the bread-winning duties in the home is no longer a rarity. With husbands either out of work, between jobs or earning less, moms can take over the lion's share of the income, writes Danielle Friedman for The Daily Beast.

The work-at-home mom has the opportunity to make significant career and financial gains in 2011. No longer are work-at-home moms merely creating hobbies. They are developing businesses with lasting income potential. Following these trends could take their businesses to the next level.

As it enters its second year, the Unreasonable Institute remains committed to supporting entrepreneurs who are determined to do the "unreasonable" – taking on the task of changing the world.

The Unreasonable Institute was started by Daniel Epstein, Teju Ravilochan, Tyler Hartung and Vladimir Dubovsky, all in their twenties, who found inspiration in the George Bernard Shaw quote: "The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man," Inc. magazine reports.

Their goal is to provide a mentorship program for entrepreneurs who have a financially viable plan for a startup that will help at least one million people who are less fortunate. In its first year, the top 50 applicants are chosen to move to the fundraising phase of gaining admittance to the Institute. The first 20 who are able to raise the $10,000 it costs to attend are able to go. This year they will accept 25 applicants for a fee of $6,500, according to Entrepreneur magazine.

More than 69 percent of previous program participants have received financial backing for their company.

The most recent Federal Reserve quarterly survey of banking loan officers revealed that conditions for business loans have become more flexible and credit lines are no longer being reduced, boding well for entrepreneurs forming an LLC and looking for capital.

For the first time since 2006, major U.S. banks are reporting their lending standards are being loosened, opening up loans and credit for more small businesses. With many entrepreneurs looking for startup capital, the easing of loan terms could provide new sources of financing.

According to MarketWatch, banks loosen standards for commercial and industrial loans by lowering credit score requirements, increasing lines of credit, requiring smaller down payments or charging lower interest rates.

The Federal Reserve reported that as many as 20 percent of large U.S. banks have eased lending for small businesses. For the first time since January 2009, most banks have stopped reducing credit limits for existing borrowers and customers.

President Barack Obama has been touring the country and pushing for Congress to pass the Small Business Jobs Creation Act, aimed at making more capital available to small businesses. Obama also supports a proposed bill that would allow credit unions to increase their percentage of small business loans.

A new online small business contest is giving entrepreneurs the opportunity to pitch their small business ideas to a group of investors with access to a total of $10 billion in funding.

The Perfect Pitch contest, hosted by PerfectBusiness – a California-based business networking firm – is open to entrepreneurs in any sector, who will have their proposals evaluated by a team of angel investors and venture capitalists. Organizers say that last year’s winner earned $500,000 in financing, and hundreds of other entrepreneurs also found business partners to help them raise money for their companies.

"The Perfect Pitch provides a rare chance for people without funds or connections to get their business or product innovation in front of more than 100 influential funders and executives," says Dan Bliss, founder of the Perfect Pitch Competition and the PerfectBusiness Summit.

The contest will be open until August 26.

According to the New York Times, small business contests can be a helpful resource for entrepreneurs – even if they don’t win. Though the odds of winning the top prize are often very slim, the investors and potential customers who judge the competition can give valuable feedback that is an even bigger help to the company in the long run.

New York City is the top location for young entrepreneurs looking to start an LLC, according to a new survey by Under30CEO.

Survey respondents were asked to rate cities based on a number of factors, including resources, events, schools and even the city’s climate and social environment.

"There is a major social scene in the city where it reigns with the most bars in the country and also countless festivals, meet-ups and social activities," the site described.

In addition to New York’s social scene, those polled also gave New York an edge for its position as a global business center and as the home of both Nasdaq and the New York Stock Exchange. The number of companies there, along with the population of the largest city in the country, means that there are plenty of customers within easy reach.

Other cities in the Top 5 included San Francisco, California; Austin, Texas; Boston, Massachusetts and Denver, Colorado.

New York’s taking of the top slot marked a noticeable shakeup in the rankings compared with 2009′s results. Last year, Boston ranked No. 1, and was followed by Chicago, Illinois; New York; Austin and Seattle, Washington.

The growing trend of pop-up stores has given entrepreneurs a low-risk way to start an LLC, while also giving commercial landlords needed tenants, the Wall Street Journal reports.

Because of low demand in the commercial real estate market, the WSJ reports that many landlords are offering small business owners month-to-month leases – which gives entrepreneurs much more flexibility because they’re not committed to a long-term agreement.

For landlords, it provides a source of revenue, and allows them to show off buildings that aren’t filled with vacant storefronts, according to the paper. Many landlords also hope that their new tenants will be successful and choose to stay.

The only drawback is that if another company decides to lease the space long-term, the business may be forced to move from a location it really likes.

Other landlords are offering even bigger deals. The Dallas Morning News reports that many commercial landlords are offering a period of free rent for companies to sign up for a lease – which can reduce an entrepreneur’s costs in the early stages of his or her company.

Members of the North Las Vegas Chamber of Commerce are working to assist small business and economic development in the city by helping promote business-friendly policies, the Las Vegas Business Press reports.

The chamber has formed a trio of business committees focused on economic development, small business advice and military affairs. The economic development committee will work with the city to help with business outreach efforts and develop programs to help expand area businesses, while the small business group will help small business owners form an LLC and better market their companies.

"As small businesses, we are tired of lip service," Shaundell Newsome, the owner of a small marketing company, told the paper. "We need programs that actually achieve results."

The military committee will work to improve business relationships with the military, particularly with nearby Nellis Air Force Base, and pursue potential business and contracting opportunities there.

Small companies make up the vast majority of the state’s businesses. Researchers at the Center for Regional Studies at the University of Nevada, Reno, told the Gazette-Journal that 98 percent of companies in the state have fewer than 100 workers, and more than three-quarters have no more than 10 employees.

Massachusetts-based Massasoit Community College is teaming up with the Service Corps of Retired Executives to create a small business training program, the Middleboro Gazette reports. The program will help teach entrepreneurs in southeastern Massachusetts the ins and outs of a small business, such as business incorporation and starting an LLC.

The school will host a series of SCORE quickSTART workshops starting next month. The courses, which will be taught by SCORE counselors, will use a series of exercises and tools to allow entrepreneurs to immediately take what they learn into the real world.

"By providing professional training to entrepreneurs starting new businesses, we will improve their chances for success, thereby boosting the local economy, and adding jobs for Southeastern Massachusetts residents," Frank Sebastian, SCORE chapter chairperson, told the paper.

The entire group of classes will be offered at the school’s Brockton campus, but the first workshop will also be available at its Canton location as well.

The program will help create jobs in an area that has been hard hit by the recession. Unemployment in Plymouth County – where the school’s main campus is located – topped 11 percent earlier this year, and still has not dropped below the national average.

Entrepreneurs looking to form an LLC in Delaware now have help when applying for some federal small business technology grants.

The University of Delaware’s Office of Economic Innovation and Partnerships and the Delaware Small Business and Technology Development Center have joined up to launch the Delaware SBIR Gateway.

The gateway will give entrepreneurs help as they work to to apply for the $2 billion in federal funds available through the Small Business Innovation Research and Small Business Technology Transfer grant programs. The initiative will provide both hands-on training and educational assistance to interested small business owners.

"This is another piece of the puzzle to bring more funding to Delaware to help inventors and small business owners," Clinton Tymes, state director of the Delaware SBTDC, told UDaily – the University’s school newspaper. "At the SBTDC, we have assembled an excellent team of experts who can help entrepreneurs obtain these federal dollars by making sure they have all the necessary components for a winning proposal."

The SBIR and SBTR grants are administered through the U.S. Small Business Administration. Eleven federal departments participate in the SBIR program, while the STTR program is made up of five departments.

Montgomery County Community College is helping encourage those interested in starting an LLC or other small business through a new entrepreneurship certificate program and business incubator, the Pottstown Mercury reports.

The certificate program will offer small business owners four three-credit courses covering various aspects of starting a corporation and running it successfully, from business incorporation to management.

"The biggest obstacle to starting a business is not knowing what to do," Amit Singh, dean of the school’s business and computer science department, told the paper. "An artist may know how to paint a picture, but he probably doesn’t know how to commercialize, deal with financing or manage a cash flow."

To help companies get off the ground, the business incubator will give entrepreneurs use of individual offices, computers and phones for $250 per month – much lower than comparable commercial rents.

Startup companies that take advantage of business incubation programs have a much higher rate of success. The National Business Incubation Association says that in the past, its members have reported that 87 percent of companies that graduate from incubators are still in business.

While there has been a great deal of attention shown toward small business bank financing in recent weeks, entrepreneurs looking to start an LLC in western New York have seen an increased willingness by local financial institutions to grant small business loans, the Buffalo News reports.

In the nine-month period from last October through June, 30 local banks in the Buffalo and Rochester areas made 592 small business loans worth more than $93 million, the paper reports. Those figures represent an 87-percent increase in the dollar amount of the loans compared with the same period a year earlier, and a 27-percent increase in the number of loans.

Those lenders have also taken advantage of a number of Small Business Administration programs to help entrepreneurs, included the 504 loan program and the Patriot Express program for veteran-owned small businesses. Over that nine-month period, 11 banks made 39 Patriot Express loans worth $5.3 million.

Research has also shown that the jobs created by small businesses are remarkably durable, and don’t disappear as companies fail. A study by the Ewing Marion Kauffman Foundation found that five years after a group of new companies began, 80 percent of the jobs created by those companies still existed.

A loan from the U.S. Department of Agriculture to the Rural Nevada Development Corporation will help small businesses expand and give new financial backing to those looking to start an LLC, the Nevada Appeal reports.

The loan will allow the organization to give entrepreneurs loans to start a corporation, or expand their existing small business if they aren’t able to get a bank loan. In total, the paper reports, the organization has now received $4.7 million from the USDA, which has been used to help more than 70 companies.

"RNDC’s financing is not for the guy with the design of the next mouse trap on the back of a napkin. It is for the serious business owner or entrepreneur who has the experience, has done the market analysis, and shows the commitment to financial management that makes them likely to succeed," RNDC CEO Ferrel Hansen told the paper.

The program will help correct one of the state’s weakest business attributes – the availability of financing. A CNBC study earlier this year ranked the state 40th in the nation in terms of giving small business owners access to capital.