The decision to form a LLC or association can help protect your personal assets from the debts and obligations of your business. Unfortunately, many small business owners avoid this step because they assume it is too expensive. For several hundred dollars, these small business owners could form LLC and acquire valuable protection that could one day protect them in the event of a lawsuit.
The incorporation or establishment of a limited liability company is not necessarily costly. There are many entities that can choose, as well as countries, each with its own costs. You can also choose to work with a lawyer to turn on your business, which is usually the most cost-effective option. If you want to save money, you can make your own incorporation, but it can be awkward because even simple mistakes in paperwork can cost you later. For many small business owners, the best option is a corporate service company, an affordable option to make sure that your paperwork is correct and is immediately delivered to the state.
The following are expected costs if you are ready to get involved.
For the creation of an LLC or corporation, a fee for filing an application is required. The exact fee will depend on the country you joined, but usually ranges between $ 50 and $ 350. The cheapest option is to form a LLC in the state of Delaware, since the state has the lowest application in the United States. Just remember that the cost is not your only concern, and your involvement in Delaware may not be in your best interest.
Fees for publication
If you join Pennsylvania, Arizona, Georgia, or Nebraska, you will have to pay a $ 150 to $ 300 fee.
Fees for annual report
This fee usually ranges from $ 25 to $ 200 and depends on your state of establishment.
Taxes on franchises
This fee will be in progress and paid each year. Most small businesses pay between $ 800 and $ 1,000, and usually there is a minimum and maximum amount of tax that you will pay depending on the type of entity you choose and the number of stocks you issue. For example, the franchise tax in Delaware is at least $ 350, but it can be up to $ 180,000 for large corporations. Delaware has the lowest franchise taxes in the country.
You also need to consider other benefits that depend on the type of work you do. For example, you may have the costs of obtaining the necessary business licenses or setting up a business bank account.
If you are interested in involving or forming an LLC with as little cost as possible, start with the state of your engagement. You do not have to work in the country you chose, but it may be more convenient to choose your home country if it is the only country in which you work. If you're thinking about another country, look at their tax rate and compare it with your own.
It can also help you to go over your options with a corporate services company or lawyer to choose the right business structure. This decision should be made not only with regard to the costs of incorporation, but also tax incentives, current maintenance, formalities and ownership structure.