Elite Staffing Solutions Blog:
11/07/2016Back to blog
Kansas Business Registration StepsOne of the essentials for starting a business is to follow these Kansas business registration tips. Many perspective startup business owners and entrepreneurs do not begin their business venture with a necessary understanding of Kansas business registration. Hopefully this post will help you save time registering your startup venture.
Choosing the Right Business StructureThere are multiple types of business one can own. Each has its own purpose and best use. It can also be detrimental and expensive to register your business as the wrong type of entity. Although I highly encourage you to research business structures on your own, it would be wise to spend the time and money for a consultation with a Certified Public Accountant. Alternatively, you could obtain free 1-on-1 consultation through your local Small Business Development Center (SBDC) or Service Core of Retired Executives (SCORE) This isn’t intended to be legal advice or an explanation of the actions you should take in your specific situation. Rather, this post is intended to provide general knowledge that will help you choose your next steps… Here are the basic types of business that can be registered.
Sole PropreitershipOperating as a sole proprietor essentially makes the owner the actual business. Your social security number acts as your business tax ID, and personal/business funds are essentially the same. As a sole proprietor, you are personally liable for the business. All of your personal assets are considered part of the business. Your money and belongings are not sheltered from the business and therefor can be ceased as a result of debt, court order, or even losing a lawsuit. As I will explain in a bit, registering a business is inexpensive and easy to do. Because of this, it is not wise to conduct business as a sole proprietor under most circumstances.
Limited Liability Company (LLC)In the most simple terms, an LLC provides the limited liabilities of a corporation (Insulating personal assets/income from business assets/incomeds) while maintaining the efficiency and flexibility of a partnership. The LLC itself is not taxed federally, but some states may have taxes for LLC income… Federally, the taxes are passed on to the LLC’s members as income tax. LLCs tend to be a good structure for many startups and small businesses, but make sure to consult with a financial professional before registering as an LLC.
CooperativeA cooperative is owned by multiple members who share a common need or would receive a common benefit from the cooperative. One of the benefits of a coop is that the business entity itself is not subject to federal income tax. Rather the taxes are passed onto the individual owner/member’s personal income tax, like an LLC.
Corporation (C Corp)A corporation is generally a larger business with multiple employees. It is owned by shareholders whose personal assets are insulated from the business. In simple words, the business itself is responsible for its debts and liabilities. Shareholders are not held personally responsible. One of the biggest advantage of a C Corp is that capital can be raised through the sale of stocks. Honestly, corporations are more complex than our current structure or our marketing consultant’s knowledge. Make sure to speak with your CPA if becoming a C Corp sounds like the right path for your business.
PartnershipsAs an entrepreneur, one of the things I’ve learned is to avoid sharing control of my business. At the same time, some businesses can’t succeed or et least experience success on the same level without strategic alliances. This is why partnerships exist. They allow more than one party to own portions of a business, but without the complexities of a publicly traded corporation. There are 3 types of partnerships:
- General Partnerships – Profits, liabilities, and responsibilities are shared equally. Any unequal distribution myst be agreed upon in the partnership agreement
- Limited Partnerships – Basically an LLC for partners. More attractive to short-term investors
- Joint Ventures – A general partnership that is limited by time or when a project is completed.