Seller Success

What's the difference between an LLC and a corporation?

Both protect owners so they're not personally on the hook for business liabilities or debts. But, key differences include how they're owned (LLCs have one or more individual owners and corporations have shareholders) and maintained (corporations generally have more formal record-keeping and reporting requirements). Even though LLCs are considered easier to start and maintain, investors and brands tend to prefer corporations.

How are different business types taxed?

LLCs, S corporations, and sole proprietorships are taxed once on profits received. C corporations are taxed twice; the business pays taxes at the corporate level, and shareholders pay taxes on income received.

Which business types give me personal liability protection?

LLCs and corporations. You don't get personal liability protection with sole proprietorships or DBAs.

How to Start a Business

1. Choose a Business Idea

Take time to explore and research ideas for your business. At this stage, take into consideration your own interests, skills, resources, availability, and the reasons why you want to form a business. You should also evaluate the likelihood of success based on the interests of your community, and whether your business idea will meet an unmet need.

2. Decide on a Legal Structure

3. Choose a Business Name

For LLCs and corporations, you will need to check that your name is distinguishable from the names of other business entities already on file with the Colorado Secretary of State (SOS). You can check for available names by doing a business entity name search on the SOS website. There are certain name requirements for LLCs and corporations (like including a word such as "LLC" for LLCs or "Corporation" for closely-held corporations).

4. Register Your Business Entity With the Secretary of State.

Cost for All states:

State LLC filing fees
Alabama $200
Alaska $250
Arizona $50 + publication fee
Arkansas $45 (online filing) or $50 (paper-based)
California $70
Colorado $50
Connecticut $120
Delaware $90
District of Columbia (D.C.) $220
Florida $125
Georgia $100
Hawaii $50
Idaho $100 (+$20 if you mail a paper from)
Illinois $150
Indiana $90
Iowa $50
Kansas $165
Kentucky $40
Louisiana $100
Maine $175
Maryland $100
Massachusetts $500
Michigan $50
Minnesota $135
Mississippi $50
Missouri $105
Montana $70
Nebraska $100 + publication fee
Nevada $75
New Hampshire $100
New Jersey $125
New Mexico $50
New York $200 + publication fee
North Carolina $125
North Dakota $135
Ohio $99
Oklahoma $100
Oregon $100
Pennsylvania $125
Rhode Island $150
South Carolina $135
South Dakota $150 (or $165 if filed by paper)
Tennesse $300 minimum (+$50 per extra member)
Texas $300
Utah $70
Vermont $125
Virginia $100
Washington $200
West Virginia $100 + $1
Wisconsin $130
Wyoming $100

5. Get an EIN

An employer identification number (EIN) works just like a personal social security number to give your business a unique identity for tax purposes. This EIN is essential for filing tax paperwork at both the state and federal levels. Also, you can use the EIN to open a business bank account.

6. Apply for a bank account

As soon as you have your EIN, you can open a business bank account.

Laws regulating LLPs, LLCs, and corporations make opening a business bank account a requirement. Sole proprietors and unincorporated partnerships, on the other hand, aren’t obliged to have separate personal and business bank accounts.

Opening a business account is as simple as going to your local bank and filling out the required paperwork. Of course, it’s a good idea to shop around and compare the rates and perks different banks are offering before you settle on a particular provider.

Need to save time? Hire us to form your LLC

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