Incorporating Your Business: Are you locked in, or can a business entity be changed?

As an advisor to startups, I see some common challenges many early companies face. One of the first is the decision on how to incorporate the business.

Since there are likely few employees (if any), and likely no revenues for a newly formed startup, it feels like overkill to register as a corporation and submit to annual meetings, reports, and filings as such. In addition to some extra annual filings, a C-corporation will also file its own tax return, and founders will pay taxes both as the corporation and on their personal tax returns. A limited liability corporation (LLC) has fewer requirements and a more streamlined tax process, and as you’ll see later in this article, comes with its own drawbacks as well.

Do your homework, but don’t get side-tracked

These decisions can get confusing and it’s good to find some resources to get informed before filing. Here’s a good video on how to choose between a C-corp, S-corp, and LLC for your business type:

Choosing a business entity video

Video: How to choose a business entity

I’ve been there. In 2008 when I started my first business, I felt nervous and confused, wanting to get everything right. Over a period of weeks, I agonized over making the right decision, trying to get all the information I needed and researching how to make all the proper filings. During that time I was completely distracted from the actual work of getting my small business off the ground.

Stick with what you know, outsource the rest

After starting two more businesses since then, I’ve learned not to get side-tracked by the busy-work of filing, and outsourced that work to someone who knew the regulations and required filings a lot better than me. In fact, there are companies which specialize in managing the incorporation process along with a whole list of other compliance issues which will come along with any business.

Don’t sweat the decision

Sometimes what seems right at the start doesn’t always stay that way. In 2016, a company I was advising was considering an expansion which would require additional funding. When incorporating however, the two founders had chosen to form a limited liability corporation (LLC). Because of the number of investors, they were not able to issue shares for the fundraise. After a brief panic and an expensive visit to a lawyer, they discovered conversion to a C-corp was not very difficult at all, and they engaged a compliance agency who made the switch in time for the funding.

What’s the lesson here? Don’t over think it at the start. Just focus on validating your product-market fit, and getting to your go-to-market strategy as quickly as possible. There are lots of great resources out there to help you with managing the corporate issues and they are worth every penny in terms of time they save and in the protection they provide by going to an expert. I’ve spoken with the experts at CT Corporation, a corporate compliance and registered agent provider. They provide a lot of good information on all these topics right on their website, and it’s free to call and just ask them what your options are on any business compliance issue. They also have an online chat feature for any quick questions you might have as well.

What are the takeaways?

  • Do your homework, but don’t let the paperwork keep you from getting your business started
  • Stick with what you know, outsource the rest to people who know more than you
  • Don’t sweat your choice when getting started, changing your corporate formation is not hard when you have help

Resources from this article:

Do you have an experience to share? Have you experienced a pivot which required changing your corporate status? Let me know your experience in the comments!

This is a sponsored conversation written by me on behalf of CT Corporation. The opinions and text are all mine.

Product Review – FlexiSpot Deskcise Pro

The following is a sponsored post in which the opinions expressed are 100% my own and not those of the sponsor.

I love tech gadgets. The holiday season is the time of year I love to look at the new tech offerings and pick my favorite new tech product for the holidays. This year my favorite new tech product is actually pretty low-tech, it’s the FlexiSpot Deskcise Pro exercise desk.

Last year FlexiSpot asked me to try out their standing desk and I’ve loved using it all year long. When they asked me to try the Deskcise Pro, I was more than happy to give it a try.

FlexiSpot Deskcise Pro

I’ve been trying to have a healthier lifestyle this year and have had some success at losing weight, but I still have a way to go to meet my goals. I’ve tried running but couldn’t sustain a regular schedule between my travel and the weather. It always seemed that as soon as I got a rhythm going, a week of rainy days, or a speaking trip, or on-site client engagement would break my habit.

I’ve had the Deskcise Pro for about a month now and I’ve managed to get on it 5 days a week for an hour or more each time. It’s been so easy to just hop on and catch up on my emails, do some research, or even watch a little Netflix while I ride. The small bike computer on the base keeps track of my time, distance, calories burned, etc.. I’ve lost six pounds in the four weeks I’ve used it and I’m definitely a satisfied user.

Although FlexiSpot was nice enough to send me this bike, I have not been paid for my opinion and FlexiSpot understood that I would share my thoughts good or bad. Fortunately, I’ve really enjoyed this product and would definitely recommend it to a friend.

Pros:

  • Well built, sturdy bike platform
  • Wide desk for large laptop and cellphone
  • Adjustable desk and seat height for my 6’3” frame
  • Folds up and out of the way when not in use

Cons:

  • Cup holder is not very deep and I sometimes knock my water bottle out by accident
  • Trip computer is really basic but functional

Price: $499.99

Overall I give the bike 5 stars for convenience, build quality, and utility.

There is currently a Black Friday sale and you can use the discount code JED100OFF to get $100 bucks off until Nov 27th.  Here’s the Link: https://flexispot.com/all-in-one-desk-bike/

Feel free to ask me any questions you may have in the comments below.