#49: How To Incorporate Your Business Officially

Step by step process

February 09, 2024 • Estimated Reading Time: 11 minutes

If you’ve been following me on my personal finance journey, you may already know that I partnered with a friend on a business venture - you can read the newsletter here.

Since I JUST went through this process, I’m going to share how to incorporate your business and some of the backend things so you can focus on growing your business!

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Incorporating Your Business

When I joined my friend on this venture, he had already created an LLC for the business. However, it was never managed properly because he didn’t know there were requirements to stay compliant with the state. 

He signed up using a business formation company that was overcharging him for annual services he didn’t need. The annual cost was about $400 a year! 

I immediately decided that I will handle the backend administration of the business because I was familiar with the process. 

While you CAN incorporate your business on your own, I recommend using a business formation for several reasons:

  1. The good services are very cost-effective when you look at what you get in terms of convenience and value. For a small cost, you can focus on growing your business instead of managing the backend administration.

  2. You can stay informed with compliance requirements and important dates such as filing deadlines because the company will send you notifications. This eliminates your need to be VERY organized. 

  3. Depending on the state you form your business, you can potentially save HOURS. Not only do you save time from actually filing documents to the state, but you also save time creating business documents that may be required such as the Company Operating Agreement, Article of Incorporation, EIN request form, etc. 

And I have GREAT news! 

Swyft Filings offers a FREE basic LLC formation package! 

If you want the barebones of starting your LLC, this is the perfect solution! While the service itself is free, you do have to pay for the respective state’s filing fees that everyone has to pay. 

With the free basic package, you get the following benefits:

Swyft Filings is a fast, free, and easy solution to get your business officially started! 

Here are other recommendations:

Compliance

Every state has different requirements for LLCs to stay in good standing, but they’re largely the same. The large part of compliance is annual filings (on time) and keeping your records up to date. Almost all states have an annual filing requirement. Every filing will have a fee, but the amount will vary state by state. 

You can view each state’s annual fees here.

Registered Agent

A registered agent is an individual or company that receives service of process, legal documents and official notices on behalf of your business. When forming a LLC, you’ll be required to appoint a registered agent who has a physical address in the state of registration.

The registered agent can be you since you should be filing your LLC in the state you’re located in or you can hire a registered agent.

The benefits of hiring a registered agent through any of the services listed earlier are:

  1. You have some privacy as the registered agent’s address will be in public record for anyone to see if they search for the business.

  2. It’s a relatively inexpensive service.

  3. You don’t get junk mail. Once your address is public, you can receive a lot of junk mail. Just like when you close on a home, you’ll receive A LOT of junk mail for home warranty, furniture, home services, etc.

If you use one of the business formation services, they all offer registered agent services. Prices will vary, but I used Northwest Registered Agent because it’s the cheapest I’ve seen ($125 a year) and their customer support will answer questions in full detail! You can find glowing reviews about the company from other happy customers.

The company my friend used was charging $250 a year so I signed up with Northwest Registered Agent for $125 a year AND they filed the form to change the registered agent for free! This change request form with the state would have cost me additional money if I filed it myself, but they made the transition really easy. 

Business Bank Account

Once your business is formed with your respective state, it’s time to get a business bank account for your LLC!

To open a business bank account for your LLC, you’ll need an Employer Identification Number (EIN). The EIN is basically the social security number for your business. 

If your business formation service didn’t already include an EIN in their package, don’t worry. It’s completely free and easy to get an EIN.

DO NOT PAY FOR THIS! 

You can apply for an EIN on the IRS website here. Once you apply online, you’ll receive an EIN immediately.

With the EIN, you can now open a business bank account. 

Here are some options:

  1. Chase - retail banks throughout the US and an amazing credit card points program that you can combine with your personal Chase credit cards. I would only use Chase if I could easily waive the monthly service fee, which is $15 a month (veterans can have the monthly service fee waived using veteran benefits)

  2. Found (free and best fit for solopreneurs or single-member online business LLCs)

  3. Bluevine (free)

  4. Relay (free & a comparable bank to Bluevine)

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Website

Almost every business needs some sort of online presence. You can direct potential customers to your website to learn more about the business or to buy products.

To have your own business domain, these website builders below (except for Carrd) give you the option to purchase a domain with them. If you want to pay for your domain separately, you can buy a domain cheaply with Hostinger. 

Here’s my recommendations for websites based on the business:

  1. Ecommerce: Shopify or Square 

  2. Digital Products/Courses/Podcast/Blog: Kajabi (instead of having 15 different plug-in, this has EVERYTHING I NEED in one place - blog, digital products, courses, email)

  3. WordPress website: Hostinger (WordPress hosted by Hostinger)

  4. Simple one-page website: Carrd (beautiful templates for almost any purpose)

  5. Portfolio website: Squarespace

Payment Processing

Regardless of how your business makes sales, you’ll need some sort of payment processor. Payment processors charge a fee for every transaction. Fees will vary, but most utilize Stripe’s fees.

Shopify, Square, and Squarespace have built-in payment processing. Most sales channels have built-in payment processing using Stripe so there isn’t really a need to add a different payment processor.

For in-person or retail payments using a credit card, I recommend Square. Setting up is extremely easy and Square has really dominated this space. 

Adding an option for digital payment via Venmo for Business or PayPal is also recommended. You can add a PayPal integration for most website builders so customers can pay using the PayPal button at checkout or you can display a QR code for users to pay digitally in-person using Venmo for Business. 

I just received my Square hardware for my first in-person selling event as a vendor at a local market! 

I hope this post was informative! It may seem complicated to figure out how to officially start a business, but it’s really not and I hope this post made it clear! 

Below is what I use for my different businesses from the list above:

I like to keep things simple. After trying so many different tools and managing it all, I decided to prioritize simplicity and convenience over trying to use the best software for a particular function. For example, while I’ll be paying more for Kajabi, it really keeps things simple to have everything working from one place. 

My HIGHLY Recommended Apps/Services

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