A corporation protects you from civil, and financial
liability as well as saves taxes for you.
A Corporation or LLC is a Legal Person. I.e., it is
its own entity like you and me with the difference being
that the corporation is a person in legal papers. Its
birth certificate is the filed corporate certificate and its
birthday is the file date. Its social security number
is a federal business Tax Id Number Number.
A corporation or LLC can sue and be sued. It has
its own assets. Though the shareholders are the
owners, the shareholders are not responsible for the debts
or liabilities of the corporation.
The bottom line is that
since it is a separate person, even though you will be the
owner, you will not personally be responsible for the debts
or liabilities of the corporation. So if a court
judgment is entered against the corporation, the only assets
that can be seized, are the corporate assets.
If you have separate bank accounts, and the corporate
assets are one desk, one computer and $1000 in a bank
account, that is all that can be seized. No one can go
after your Home-Based or personal bank account.
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In general, if you are one person, and have a lot of personal
assets, incorporate or
form an llc. You will be protected. If you
don't have a lot of assets ( such as a Home-Based and an expensive car
), you may want to just file
a Business Fictitious Trade Name to start. A corporation depending on the
state you want to incorporate, or form an LLC, may cost $100 to $200 more than a Business Fictitious Trade Name but it protects your personal assets. A Business Fictitious Trade Name does not
protect you. If you file a corporation or an LLC, you
don't need a Business Fictitious Trade Name .
Note: If you incorporate, the default type of incorporation
is a "C" corporation. Then, you can change it to an "S".
So, just go ahead and incorporate or file an LLC, you don't have
to worry a lot about the type of corporation or LLC.
Should you get an LLC or a
Corporation?
If you are a small business just starting out, just
get an LLC to start. In most cases, you will not
be wrong. An "S" corporation is also a good
choice. You cannot go wrong either way.
The point now is to get some cheap insurance to protect
your personal assets and both of the above are good
choices. Later, you can change structure or
type of entity.
Should you incorporate or form
an LLC in another state?
Just keep things simple for now. Just file in
your state, and you will be alright and able to save
money and have corporate protection. It is just
too complicated and it costs a lot more to incorporate
in a state other than the state in which your business
is located. Also, you may have to
incorporate or form an LLC in your state as well in the
other state. That will cost you double.
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Frequently asked questions about Business Fictitious Trade Name filing
 |
Difference
between a Business Fictitious Trade Name and a
Business Fictitious Trade Name
. A Business Fictitious Trade Name , a “Business Fictitious Trade Name ”
(Doing Business As), an “assumed
Business Fictitious Trade Name ” or a “trade name.” are
all the same.
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Corporation
or an LLC Business Fictitious Trade Name
You only have to file a Business Fictitious Trade Name if
corporation name is different from trade
name.
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If I am
Doing Business under my personal
name, do I need to file a Business Fictitious Trade Name ?
You don't need to file a Business Fictitious Trade Name if you
doing business in your own personal
name. Only if the Business Fictitious Trade Name is
a name other than your personal legal
name.
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How
does the Business Fictitious Trade Name filing protects my business
name?
Generally, the name is not protected but
in some states the filing creates a
rebuttable presumption that you have the
rights to that name.
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Corporations
or LLCs Doing business under a
trade name
You only have to file a Business Fictitious Trade Name if
corporation name is different from trade
name.
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Do I have to
publish my Business Fictitious Trade Name ?
You may depending on the state you are
doing business. Publication in included
in your filing fee.
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When
can I start my Business and open a bank
account?
You need to file
your Business Fictitious Trade Name before you can start a business
or open a bank account.
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Do you
conduct a Business Fictitious Trade Name search?
Yes, in most states, we will search for
Business Fictitious Trade Name availability.
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Take
this Question & Answer Test
to Find Out Whether You
Need to File a Business Fictitious Trade Name ,
Get a Tax Id Number Number,
Incorporate, Form an
LLC, or Register Your
Business by Filing a
Business License or Permit .