Five Incorporation Mistakes
If you haven't incorporated before, you should be aware of the possible marketing tricks it may occur. Generally you should be looking for a full incorporation service since you are consulting an incorporator, although most of the steps can be done personally by you. Why that? You pay for it.
1. C-Corp vs S-Corp
If you plan to form a corporation in the USA and you are an US resident (doesn't matter if you are a citizen or not) your future corporation is eligible for IRS filling in order to become an S-Chapter Corporation. This means that you and your corporation will not be double taxed. Make sure if this feature is included in the service package you chose and if not, what's its price.
International (non-US resident aliens) entrepreneurs are not allowed by the IRS regulations to switch to S Chapter taxing, so if you are one, make sure you are not paying for it as it is useless.
2. Licensing
There is a popular belief that once incorporated you may start operating business through your brand new company. This is only partially true; whether is Delaware whether Nevada some businesses require approvals and licenses from state departments. The usual kind of licenses you must aquire for your comany are: Occupational/Professional/General Services License, Contractor's License, Retailer's License, Grocery Supermarket Retailer, Restaurant License, Wholesaler's License and much more.
You must be aware that when you incorporate none of these licenses will be aquired. If you need assitance in purchasing them you should consult the incorporator. Also, special requirments apply to some of them that you must meet.
3. Employer Identification Number
The EIN is assigned by IRS; it is like a SSN for legal entities. In theory, you are not required to obtain one but in practice its not posible to operate without it. You are not able to file the tax fillings to IRS without it, you are not able to open a bank account without the EIN and there are much more reasons to get one. The EIN is assigned for free by EIN by submitting a form, but they are very strict about it. One mistake in the form is enough to file the request again. Therefore, if you are not familiar with it you should ask you incorporator to do it.
Some business incorporators include EIN obtaining in their packages while some do not; you should check if it is and what's the price if it is an extra service.
4. Registered Agent
If you incorporate in a remote state you must have a registered agent there. Most of the incorporators include it in their service packages, but you must be carefull not to fall in a scam in which you will be required to pay an expensive registered agent fee for the next years after incorporation.
5. Taxing
Besides the franchise tax usually handled by your incorporator and payed by you, you might be eligible for other taxes, local or federal ones. The incorporator usually does not take care of your tax fillings so you must consult an accountant for that. If you fail to provide the tax fillings to IRS your company may be penalized by it. However, you should ask you incorporator if they do provide accounting services, this will save your time and usually your money too.
