As is fairly commonly know, Shira and I have started in a business (Ideas2Executables -- we turn your software vision into reality). Recently, I got asked how we did it. It wasn't that hard, so I thought I would share the steps we took to get things up and running. Please take this as motivation and not legal advice, or my wife will kill me.
- Talked to a lawyer. The conversation was very brief, as he told us the differences between a corporation, LLC and sole proprietorship. It became clear very quickly that a sole proprietorship made the most sense. There's almost no paper work to file when you start a business that way and you can easily upgrade to an LLC if you would like. You don't get as many tax deductions as an LLC or Corporation, but in general, business expenses can be deducted. The main thing you lose by not being an LLC or Corporation in the ".Inc" or "LLC" at the end of your name. This was the route for us.
- There was no federal paperwork that had to be done, all we needed to do was to register the business with Arlington County. This consisted of doing 3 things:
- Get a "Doing Business As" certificate from the county so that we can do business as something other than "Simon Co." This cost about $13.00.
- Get an occupancy permit so we can work at home. This involved filling out a form or two and was free.
- Get a business license. This was free as well.
- At this point, we had a real live business. To make things a bit more official, we visited Bank of America where we opened up a business checking account. This allows folks to write checks to Ideas2Executables (feel free to write one yourself to test this out). They also set us up with a Visa and Debit card, so we can pay for stuff from this account as well and keep better track of business expenses.
That's about it. I'm sure different locales will have more less work associated with setting up a business. But overall I was amazed at how easy it was.
Let me know if I missed anything or if any of the above isn't clear.