Starting a business can be a difficult undertaking that many people find they require help with. A lengthy process of planning is what awaits those interested in setting up their own business – a process that sadly proves too difficult for the majority of startups, who become overwhelmed from the get-go. Services such as LegalZoom and ZenBusiness aid owners in the document-heavy legal side of forming a business, but necessarily cannot do everything involved in starting a business.
Business Formation Process
There are many steps to start a business. The first step towards ownership is deciding the type of business one hopes to run. This will be determined by a business idea that suits the owner’s personal interests, goals and natural abilities as this ensures they will stay motivated when the running the business inevitably becomes difficult (which at times, it will).
The next step is selecting a name that both follows its home state’s naming regulations (i.e. that it cannot allude or suggest the business is connected with the government for example) and personally resonates with customers. It must also be an available name, which can be discovered by searching the home state’s database.
Before funding for the business’s startup costs can be sought, there are a few steps that must be completed. Firstly, the business’s costs must be calculated as specifically as possible so that the correct funding source for the business can be pursued. Secondly, a detailed financial plan to control spending is vital. There are several funding options to choose from: bootstrapping, small business grants and small business loans.
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The fourth step involves choosing the business’s structure. Registering the business as a legal entity (such as an LLC, corporation or non-profit) is advised because it increases credibility and protects the owner from personal liability in the case that the business is sued. It is also possible to register the business as a sole proprietorship or partnership, but both of these options will not divide business assets from personal ones in the eyes of the law.
If the owner opts to register the business as an LLC, corporation or non-profit, it’s advisable to set up a business bank account next as this further entrenches personal asset protection. Having a business account also makes accounting and tax filing much easier.
The business must now insure itself. Business insurance helps manage risk and allows the owner to focus on growing the company instead. Workers’ Compensation Insurance is compulsory for all businesses, whilst General Liability is highly recommended but not a legal necessity. Companies offering professional services (e.g. accountancy firms) should also consider Professional Liability Insurance Visit Here: magazines2
How LegalZoom and ZenBusiness Help
Services such as LegalZoom and ZenBusiness help owners with the registration section of the business formation process. Moreover, if the owner seeks to register his business as a limited liability company (LLC) these are the products that will be of service to him/her.
As part of its basic package, ZenBusiness includes a registered agent (free for the first year, then $119 per year after), drafts the operating agreement, sorts out the Employer Identification Number (for $70), files the annual compliance report (for $119 per year), creates a web domain (for $35) and organises a worry free CPA.
ZenBusiness is described as being used by entrepreneurs looking for premium-level service on a smart budget. Given that the top package takes only 3-5 business days, ZenBusiness is meant for entrepreneurs with a desire to form an LLC without having to pay a significant premium.
LegalZoom offers a similar service, though its reviews suggest it is used by those who are more comfortable working with a well-known brand to form their LLC and are consequently willing to pay extra for premium services and features. Prices are more expensive for nearly every service: a registered agent costs $159 extra per year, the operating agreement $99 extra and the EIN registration $60 extra.
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Concluding Remarks
Forming a business can seem an insurmountable task, but it needn’t be. Services such as ZenBusiness and LegalZoom make the process infinitely easier. Their services pertain specifically to the document-heavy legal aspect of forming a business but differ slightly. ZenBusiness offers LLC packages that are specifically tailored to small business owners. Whilst LegalZoom holds significant brand power, a price premium is required to access it. On balance, both LLC services are easy to use.
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