The WAY to WOW Shows
Creating Your Business Entity
February 7, 2024
Automatically generated from YouTube captions; names and wording may contain errors.

[0:00] making money I'm your host Kevin bemel and we're here every Wednesday morning at 10: a.m. Pacific time and we talk about all things related to your professional life business life wealth building um people making money hence the name of the show so today um I'm gonna I I want to jump right into our topic which is um starting your business entity so um you know for for those of you who already have a business you probably went through some kind of

[0:35] process like this um for those of you who are thinking about starting a business one of the things you're going to need to do is to have an entity for you know for the business to be I guess is the best way to put it and I'm going to talk about the three most common entities and then really take you through um how you start them and and what I think you're going to find is um you can do most of the work yourself um which will save you quite a bit of money um and um you know you may you're you're

[1:12] you're going to want to get some uh accounting advice um and potentially some legal advice as well um but if it's you know for a small business es especially um and and for a startup um you know you don't necessarily need to spend thousands of dollars or Worse tens of thousands of dollars on all kinds of um business startup stuff um these days in certainly in all the jurisdictions that I've U recently um been involved in which includes California um Arkansas

[1:50] Virginia um I think those I think I I in just in the last few months I've dealt in those three jurisdictions so um the the the state the the It's usually the Secretary of State for the particular State you can go to their website and you can do all of what you need to do through their website um and it's actually pretty straightforward pretty pretty simple to do um so let's let's just sort of Jump Right In um if you're going to start a business it's probably going to be either a sole

[2:27] proprietorship an LLC or a corporation that's weird you see those bubbles I don't know why it's doing that but anyway um so the the simplest and least expensive to create is a sole proprietorship and I've talked about types of business entities before so I'm not going to get into um the the sort of pros and cons of them if you want to if you want to know about that um please go to our our YouTube channel uh youtube.com theeway to wow and you can look up the

[3:02] show I did I think it was just a few weeks ago on on business entities and I talked about uh potential benefits and challenges for the different types of business entities um but um the easiest one to form and the quickest one to form is is a sole proprietorship and that's because the there is really no entity separate from you when you're a sole proprietor okay it's it's just you okay um and and so probably and you're probably going to give your business a name okay and the the name you give your business

[3:40] um will need to be established if you will through something called a fictitious business name statement or what's sometimes known as a DBA doing business as okay so I'm going to show you how to how to set up a a fictitious business name um and and and then and that's it and then once you have um once you have your um uh fictitious business name now you can open up a checking account in the business name okay and um the What's called the vesting the way

[4:16] the account name reads is probably going to be uh so let's let's say I I was I you know started a sole proprietor so the account would probably read something like Kevin bemel doing business as or DBA um you know uh the way to wow show okay um and and so then um on the checks um if if I even got them which these days I probably wouldn't but if I had checks I would just put you know the way to wow show and and and that would be my business checks okay and that that checking account would be a separate checking account for my business um and

[4:53] then I'd have my own personal checking account and that's one of the reasons uh one of the things you're going to you're going to want to do if you start a business is start a separate checking account for the business it'll make it a lot easier to keep track of your income and expenses especially come tax time you know as a sole proprietor you're going to have to file what's called a Schedule C on your in your personal tax return okay and any uh any net income that results on the schedule C then gets reported as income to you as an individual and you pay taxes on it okay

[5:30] the other two types of entities I'm going to talk about are an LLC which is short for limited liability company okay not Corporation limited liability company okay and the other the third one is a corporation now an LLC is um easier to F Well yeah it's these days I'm not sure it's necessarily easier to file it's usually less expensive to file okay um an LLC um by its nature is what's called a pass through entity meaning although

[6:06] it's a separate business entity it doesn't pay taxes what it does is any income the LLC makes gets passed through to the members of the LLC um and then they pay taxes on that income with a corporation okay so corporations come in two types there's a cc Corp and an es Corp so an es Corp is also what's called a pass through entity meaning if the ESC Corp has a profit that profit gets passed through to the uh shareholders of

[6:41] the corporation and they pay taxes on it on their return okay a C Corp though is its own is is is not only its own entity like an es Corp but it's a taxpaying entity so if if at the end of the year that corporate coration has any profit the corporation pays profit now if it distributes that profit as dividends to the shareholders so then they'll pay taxes on the dividends as well and if you if

[7:16] you go and look at my show on on entities you'll see one of the one of the downsides of a C Corp is it's subject to this sort of double taxation of its profits one at the corporate level and one at the shareholder level okay so when it comes to forming a corporation there's not a big difference between forming an S A CCP and an S corp the difference between the two is when you form a corporation it's considered to be an ESC Corp unless you elect to make it I'm sorry when you form a

[7:51] corporation it's considered a C Corp a C Corp unless you elect to make it an escort and the the S comes from sub chapter S of the Internal Revenue code that's why that's why escorp so it's a there's a document or a form that you file that with the IRS in which you elect to make the Corp qualify the corporation under sub chapter S thereby making it a an es Corp okay that's really the only difference between the two and and I'll show that too so I'm

[8:28] going to go ahead and uh share my my screen and and start going through some of these so you can see um uh what what they look like so this this is just you know a page on my browser so let's first of all um let's look at um uh filing a fictitious B business name statement so um I'm just going to search fictitious and you'll just do the same thing fictitious business name state okay oops and I spelled it wrong but see Google collect and you'll see like Legal

[9:05] Zoom you you don't you know you can use Legal Zoom if you want but you don't need to because see right down here Los Angeles County registar Recorder County Clerk this is actually who it gets filed with okay so this is a this is a Los Angeles County part of their their website and here it is file a fictitious business name statement now gener speaking you're going to file a fictitious business name with the county in which your business is located okay um now if you're living in uh

[9:40] Louisiana they're not called counties there's a different name they're called uh parishes I believe okay and I I think in in Louisiana you would file it in the parish in which your business is located okay so um any business can file for a fictitious business name okay now a so for a sole proprietor that's that's really all you're going to do but if you're an LLC you can file let's say you're um uh let's say I create an LLC uh beml

[10:15] company LLC okay I can file a fictitious business name under which beml bemel LLC does business so I could file a a fictitious business name uh the way to wow show for and for bemel company LLC and so it would be um you know officially if I was if I were um acting as the way to wow show um I would say bemel company LLC doing business as the way to wow show okay so an LLC a

[10:52] corporation they can also file for fictitious business names so this applies really to any kind of almost well not any kind but many kinds of fictitious business names okay so um you can see here and and and La Count's I think has this is a you know really um good website for doing this so first of all they have a live chat over here if you have questions um and then they offer you different ways to do it so if this is a new filing okay you can first

[11:27] of all you can do it online you see the get started button here and they have a short video tutorial on how to do it okay you can do it in person if you want although that's kind of a hassle and you can also mail it in okay um and then you come down here filing requirements so as we go through it excuse me you can review the requirements in advance but as we go through it you'll see pretty much what you need to do so I'm going to do I'm going to file it online it does cost an extra $9 service fee to file it online but compared to the time it would take

[12:02] to go down to the county building the county registar office and all that you know the nine bucks is worth it you just click on that okay and you see here there's there's several things so what would you like to do today file a fictitious business name okay so this is if you're going to file an original one or you're going to amend one that's already filed or you're going to renew it or you're going to abandon or withdraw filings okay all of that can be done here here now what do these different things mean well an original means you're you're creating a new fictitious business name an amendment means you're making a change to an

[12:38] existing um fictitious business name filing a renewal they have to be renewed periodically I think here in LA county it's every five years if I remember correctly abandonment and withdrawal means let's say you had a business that was using a fictitious business name and you're not going to you don't want to use that name anymore so you'll file to abandon or with withdraw that filing so that if if some other business is using that name you won't be held responsible for it okay now there's several steps to completing a fictitious business name filing and the first is to do the

[13:15] initial filing then it has to be published in a in a paper of General circulation I'm going to show you how that's done as well once and it has to be published typically like here in California it's uh once a week for three weeks once the the publication has um done that that publishing they're going to send you a proof of publication okay and then you need to file that proof of publication with in this case LA County okay and now if you ever want to get a

[13:50] certified copy you can do that here as well all right so let's go ahead and click on file he we're going to do it online okay and we're going to do a new filing okay so for new filings requires publication you see all that you see that there okay so let's and the first thing you're going to do is is you're going to search for it you can see fictitious business names expire five years from the date filed so let's let's come up with a name um for for a business um well you know I'll just use my show name so the the way to wow uh

[14:28] show okay oop not s the way too wow the way to wow female pigs okay so we'll click this no results found so nobody has used nobody is using this name so I click here I have fa I have verify my fictitious business name is available okay and then we can proceed okay now it's going to ask um you know to fill in the name of the person okay so full name or company name so you can see this right here by the way customer information for credit card payment and

[15:03] ID offc using vital check okay please note the individual selected to sign the form and email and email address when provid you will be the individual receiving the email to complete the online the online identification authentication and credit card payment process okay so in other words you know there's got to somewhere there's got to be a real person involved even if you're filing on behalf of a corporation there's got to be a real person involved because somebody's got to receive the emails okay so um full name is you know Kevin bemel okay first name Kevin last

[15:39] name beml okay address 256 South this is my this is my business address sou South Robertson Boulevard um number 120 okay Beverly oops Yeah Beverly Hills oops not you can see what a terrible typist I am okay California let scroll down here a bit zip code 90211 okay um let's see the way to

[16:16] wowow atl.com okay and confirm email the way oops the way to wow I'm having trouble typing today wowow bmo.com oops okay and phone number um 530 430 7227 I believe it is okay okay so there you've got all the information filed in and look we all know our our information no no no big deal there okay click

[16:52] proceed okay current business type so you see the different types here okay co-partners so for a sole proprietor okay that's an individual okay and there you go number of register number of registrants one because it's an individual okay eligible signer owner the individual okay all right so now you need to add a registered owner that's that'll be that'll be you okay so again full name Kevin bamel

[17:27] oops okay put in your mailing address you may be asking why do I have to put this in twice that's just it's just what they're asking to do okay um city is you scroll down to Los whoops where's Los Angeles here it is Los Angeles okay um mailing State Cali CN mailing zip code 90 oops two and I

[18:03] realized I put I'm sorry I put the wrong City in um it's let's get this out it's not Sol sand just Beverly Hills there we go okay and County uh or country I mean um excuse me so that's going to be the United States scroll all the way down here okay there we go United States okay and we're going to add this now you notice if you if you're if you're a service member overseas and you have an international business address so you'll you'll click that there okay but you can also you'll notice here under state it

[18:40] says military okay so if you have an APO or an fpo address so you you'll be able to add that okay so you just click add and there it is okay all right so now we have a registered owner so we proceed okay uh full name Corporation name LLC name right so Kevin bemel okay signatory's name um if Corporation we don't have to worry about that signatory's title owner okay and see they've actually like pre-filled this in okay okay and for each business name you put it in here okay so

[19:16] the way to wow shows Okay add okay and there you go now by the way if you want to have more than one fictitious business name you can file more than one at a time so if we wanted to add a second one um what could it be uh how about uh um I I'm just coming up with something crazy uh uh swans products I don't know okay add

[19:52] there you go so I could do two okay um I'm I'm not going to but um but you could do you could do more more than one okay and then you proceed okay registered business address okay so and again this is going to be the same thing you say what why do they keep asking this uh because they do because they're the county and you know and they're going to do that number 120 business City uh Beverly Hills Business state California business ipco 90211 uh business county Los

[20:29] Angeles okay and business country United States all right and requestor information okay so this is this is you okay so you don't have to put in your first name but just I just do so that if the mail comes in okay 256 South Robertson Boulevard oops Yeah Robertson Boulevard number 120 okay okay and again Beverly Hills

[21:04] California and 90211 okay now here's a this is an important question date registrant commence to transact business under the fictitious business name now in general you want to file it before you um start doing business but you know you may have you may have started your business let's say we started the business on Monday okay um and and we were so busy we just didn't get a chance to start it it doesn't really matter because it's only going to ask for the month and year okay now in in fact you if you started in January you you could put January 2004

[21:40] See it'll it'll it'll go in oops 01224 okay there we go yeah um but you know we're doing it in February so all we have to do is just put February 2000 oops 2024 okay um um and and then oops oh it needs a there we go okay proceed okay now you're gonna it's going to give you an opportunity to look over all of it okay everything that you put in okay so registered business names the way to

[22:17] wow shows business address page there it is registered owner okay that's me um fictitious name the signer it's going to be me okay requester information page there's all that stuff okay requester information okay and then um I'm not going to actually do this because I I don't want to you know submit something to their system that it you know I'm not going to use but you'll you'll you know you'll review the information you'll click that you verified it okay and then you'll sign it using your mouse okay and if you

[22:52] don't like how you did it you can clear the signature and then you submit your order okay okay and what you're going to get is a window that basically says you know um thank you for your submitt we're going to send you a confirmation um email within I think it's three to five days so that you can pay the fees because they're going to verify they're going to do all the verification that to make sure that you've done what you're supposed to do okay and if there's anything wrong they're going to let you know otherwise they're they're going to send you an email and in that email is

[23:28] going to be a link at which you can pay the fees for submitting the um the fictitious business name statement I think in LA county it's uh I want to say $55 plus a $9 processing fee or something like that so it's it's not a lot of money but it's you know it's money okay once you pay the fee now I know in La County's case um once you pay the fee that then you're going to almost immediately get another email with your fictitious business name statement okay and um let me uh I'm going to bring up

[24:04] um a fictitious business name statement that I um recently filed let's see here we go is this it yeah okay so uh let's so let's go back over here and let's stop sharing and I'm gonna I'm GNA um let's see if it'll bring this up oh

[24:40] nope unable to share screen okay it's not going to let me bring up the document unfortunately okay um sorry about that but um um you'll you'll get a PDF copy of the uh fictitious business name statement and it's gonna it's basically going to show the information um that that you put in okay and then it's going to be electronically signed by um the someone in the county uh someone in the county recorder's office um um it's probably not going to be signed by the county clerk himself but one of the one of the staff there and it'll it'll give the date that it

[25:15] was filed Etc okay so then once once you've gotten the fictitious business name statement from the county so the next thing you're going to do is is and I'm just going to close this so it doesn't actually get filed next you're going to do is um publish uh fictitious business name uh okay and and and you're going to see there's lots of um Publications and in

[25:51] fact um here if you go to the here's here here at the LA Count's website they give you a list of newspapers in which you can publish it okay um that that qualify as newspapers of General circulation now some are going to be more expensive than others so for example the Los Angeles Times is probably going to be much more expensive than the Los Angeles Sentinel okay but I mean and it doesn't matter like like you could put it in the Palisades post even though you don't live in the Palisades it doesn't matter as long as it's a

[26:26] newspaper in general circulation in the county okay um and and the fact of the matter is I I I didn't use any of these I used a a paper called the LA Daily News um to to publish mine um and uh so let me let me let's see if I can find that um I think it's under Central news I believe let's see nope nope that's not it

[27:18] Okay this may be it no this isn't okay well it does it doesn't really matter um but so here's um here's a here's this is called Central DBA okay and the total cost for legal publication in Los Angeles account $40 plus two per additional business name or register for each filing approximately $10 a week okay um and what you'll do is you'll put in your filing number you'll put in the filing date and you'll search okay so here I'll I'll do it for uh I'll do it for one of mine um here's let's

[27:55] get the filing number okay so there's the filing number the date is uh February 5th let's see what we come up with okay there it is there's mine okay and you can see who the enter so then you can just go continue okay and um okay I don't already have an account so I would fill in all this information okay filing details there's there's each here's all the and they they have all the information already uh

[28:31] filled out okay shipping information I put in that I put in billing information my credit card okay and proceed to check out and it's going to check me out and then it's going to publish um the it's going to publish the um the information um I think it's it it's uh I believe it's it's uh must be four weeks not three weeks um but in any event it'll publish it okay and then once it's done publishing oh you know what I'm sorry you you couldn't see that oh shoot okay

[29:08] here let me go here sorry about that okay so now you can see um I'm gonna I'm gonna go back so oh come on there you go okay so I filled in the filing number and the filing date of of my fictitious business name statement searched okay here it is I click on continue okay and I would just I would fill in my email address and create a password so that that creates an account I would the contact information would be me I just fill that out again you've seen me do that numerous times already okay and you see it's an original fictitious business

[29:44] name filing um okay business structure individual that's wrong it's it's a corporation okay number of owners oops not two one okay and there's the different fictitious business names okay sh this is where correspondence gets mailed to okay here's where you put in payment information credit card number you would click proceed to checkout you'd click check out and then it's going to publish um all of the um all of it's going to publish the information uh every week for three or

[30:19] four weeks whatever the requirement is okay and then you'd go back to the LA County uh in this case LA County website and you would file the um verification of publication and now you're done and if you're a sole proprietor you're done and now you're now you're in business and you can take that as I said you can open a bank account all right so now what I what I'm going to do is show you how to file for a um uh an LLC or or a corporation so while the fictitious business name

[30:55] statement happens at the county level level and LLC um happens at the state level and I'm just going to use California but like I said every every state has this i' I've done them in a couple of other states okay and uh oops business here we go okay so you have in California we have something called Biz file online Okay um different states have different systems or different names but they all if you go to the Secretary of State for the particular state in which

[31:30] you want to create the entity do that and you see here you have you can free search of free business search you could look for names and here you have register a business Corporation limited liability company limited partnership okay so that's what you're gonna that's what you're going to do okay and here it is uh okay and it depends what you're going to file now limited liability companies initial filings okay so this is this is a California LLC okay and see it's going to there's a $70 online processing fee file online

[32:06] okay so you click that okay and oh that's right I don't have my account here okay let's see if you are visiting for sign up for a new account below uh hang on one sec I already have an account so let me let me get the login information I forgot I have to use a different browser um when I when I do the show so okay so um go ahead and put

[32:43] in email address and okay let's see hang on one sec I'm going to stop sharing this for a minute and and here we go settings privacy dump

[33:23] dump okay there we go okay go ah and copy this and sign in save that there we go okay sorry about that a little uh okay okay so after you sign in you get this menu right here okay and there's you know you can read through this stuff it's it's you know it's it's no big deal um and and you scroll through and you get all the way in and I

[33:59] have read I I mean I've read this stuff before it's all about privacy and that kind of stuff okay next step okay so you first of all you're going to fill in the submitter so in this case again it's me Kevin beml email address uh the way to wowow atl.com oops not the way to Pal there we go the way to okay good phone number okay no extension Next Step okay

[34:34] Professional Services notice okay this is telling you if you might need to have a license depending on what your business is okay a previously reserved name will be used for this filing no I haven't previously um reserved the name okay so what is the name it's going to be the way to wow shows okay and then they ask you to put it in a again just to make sure you haven't made any mistakes okay next step oops let's go back there what do they

[35:11] say oh LLC there you go uh yeah so for an LLC you have to put okay there we go you you can see it's checked off now okay so now address six South Robinson Boulevard oops number 120 okay United States and initial mailing address um and by the way PO Box

[35:49] cannot be used just keep that in mind okay so it's the same thing again okay country us okay so we got that filled in you can put in attention if you want to I'm not going to here okay agent for service of process so when

[36:25] you're creating an LC or for that matter a corporation or any kind of entity other than an individual that entity needs to have someone who if the entity is sued can receive what's called process which is basically the law suit okay and there are two types in California there's an individual which is probably what you're going to use or there's a California registered corporate agent okay now if you if you're going to use a California registered corporate agent the person has to be um qualified they

[37:00] have to be registered to do that okay so in in my case I'm just going to use an individual it's going to be me okay and here we go same address now you'll notice there is no option other than California for the agent for service of process and the reason is

[37:35] because California does not want an entity doing business in California he they do not want Californians to have to go to another state to to serve you with a lawsuit okay so let's say you live in Florida but for some crazy reason you want to have your entity um do domicile meaning in California so you cannot have your agent for service of process in Florida you have to have someone in California and in that case you might have to use a californ registered

[38:10] corporate agent okay you're probably going to have to pay that that corporate agent okay um but there's got to be someone here in California who can accept uh service of process okay so this is an LLC so it's going to it's going to ask you about the management structure the L c will be managed by one manager more than one manager all LLC managers and whichever it is whatever you and your partners I use that term loosely because you're not Partners you're co- your um co-members or your members in an LLC so let's just say there's going to be one manager okay

[38:46] file date so you can either file the current date or you can file a future date so it'll be held and it'll be filed on that specific date if if you don't need it filed right away okay but let's just go ahead we're going to choose um current date okay next step okay any attachments now you don't attachments aren't required um so you can just skip this okay and now you get to review and signature so is there going to be one signature or multiple in this case I'm the only member there's one manager so it's just going to be one signature okay

[39:21] and you'll notice by sign you say by signing I affirm under penalty of perjury that the information here in is true and correct and then I am authorized by California law to sign okay so you click that and then you're going to you in in California you add a signature you just type your name in you put in the date okay so here's my name today's date save there you go that's a signature Next Step okay if you want a certified copy you click that and you know if you want regular filing you

[39:57] click that if you want ex expedited filing it costs more okay now note uh limited liability company may have to pay a minimum $800 tax to the California tax board each year okay so they're giving you that warning they're also telling you again the filing fee of $70 okay next step okay now I'm not going to actually file this because I I I don't need it oops something here wrong with processing oh standard processing fee okay next step okay now if I wanted to file it I would click file online Okay um I'm not going to do that because I I

[40:32] you know I don't need this entity okay and then if you go over here to my I'll just save it as a draft okay okay so then if you go over here to my work CU it'll show up and it takes some time to get it approved okay so um I filed a a business on um uh the 16th of of uh of January and it took about I think it's about two weeks to to get it approved okay and and then okay I'm going to stop sharing this go back over

[41:08] here so once your your LLC is approved by the state and of course you've paid your fees and all that then you'll you'll have to file something called a statement of information okay and um I'm going to go back to sharing my screen uh here we go yeah here it is okay so see here it says file a statement of information so once your entity is approved you'll file a statement of information okay and you'll search your entity name here and if it's

[41:45] been approved it'll come up okay um and I I'm not going to be able to do this because I didn't file The Entity but you'll you'll bring up the it'll bring up the entity and you'll just fill in any information um although typically it's going to be already populated with the information it needs and you'll sign it electronically you'll pay the fee and then it'll be done and if you look here on my work crew work CU you see here statement of information um and you see I did that on

[42:20] the 31st of of uh of of um January okay so those are basically the two steps that you have to take in to to file for an LLC now um you can see it's pretty easy to do so the question is you know should you pay someone to do it not necessarily however before you decide whether you're you want your entity to be a sole proprietor an LLC a corporation or something else you you should talk to

[42:56] your accountant accountant okay because there are different tax implications for different types of entities and you want to be you want to make sure that you've checked those out um before you create the entity okay because once the entity is created um the government is going to expect you to pay taxes on it okay so now that's not to say I mean if you create an entity and then it turns out to be not one that you want so you can always um you can always shut the entity down but in the meantime

[43:31] you've wasted the filing fees those won't be returned okay and so um I I I I can't recommend strongly enough that you consult with your accountant before you uh decide what kind of entity um you're going to operate as and and before you actually file that entity and um and and it may you may also want to um talk to your lawyer now you say well I don't have an accountant or a lawyer okay well now's a good time to get one right and and if

[44:06] you're just starting out you know find someone who you know who knows what they're doing but maybe they're just kind of they're you know not they haven't been practice a long time so you know they're willing to work with you in terms of cost and such and you can explain hey I'm starting my first business and um you know I just need some basic advice on what kind of entity I should create for the business um you know would you be willing to advise me now you know accountant you know shouldn't I mean a discussion like this probably isn't going to take more than an hour at the most okay so may cost you

[44:42] couple $300 something like that um lawyer an hour of their time probably costs more than that these days um but it'll be money well spent because it'll get you off on the right foot all right so um so you saw what it was for and you can see how simple it was for the LC now once the once once you've applied for the LLC and the the secretary of state has approved it you're going to be able to download um what's What's called the um um uh LLC um Articles of

[45:18] Incorporation okay um and in fact the the the the website makes them for you I know when I started my first corporate a which is now back in 198 1992 I think it was um I had to I hired a lawyer he had to draft the Articles of Incorporation and then we had to submit them to Secretary of State and then after that he had to draft the bylaws and all that kind of stuff nowadays all that all that stuff uh is is online okay and so you know you you don't even need to have a lawyer draft

[45:53] Articles of Incorporation unless you're doing something something special but for just a typical LLC or Corporation um you can just you know the the the state of the Secretary of State's website will generate them as a pro as part of the process of of the filing and then the bylaws you know again you could draft your own bylaws and just have a lawyer look them over for you and save yourself uh you know the cost of of the lawyer doing it um again if again if there's nothing you know unusual about your business and that's that's one of the reasons why

[46:28] you're going to want to talk to a lawyer so you may need something special in your bylaws and in that case you're definitely going to need legal advice to do that okay so um you know as I've said many times on the show I'm not giving you accounting or legal advice um all I'm doing is showing you how these systems work and um highly recommending that you get uh legal or accounting advice okay so we have a little bit of time left let's go back then and look at um filing a corporation and you're going to see that it's very similar to filing

[47:03] an LLC so here we are back at this same thing and instead of clicking articles of organization LLC article of In Articles of Incorporation California uh California Corporation General stock so you can this is the most common type now by the way you have other types here Articles of Incorporation California Corporation benefit so if you're going to do some sort of um nonprofit you may want something like this okay Articles of Incorporation C corporation insur if you're an insurance company if you're an

[47:38] outof State Corporation if you're in accountancy or law social purpose right so you can see if you're going to create a corporation you need to talk to a um a lawyer what type of Corporation are do you know should you create right now if you're an accountant uh you're you're probably not going to create a general stock Corporation it's probably gonna well this is an out of state um uh actually I take it back yeah here it is California it's GNA probably going to be a professional Corporation because

[48:14] you're a professional okay um but you know this is where you're going to need legal advice okay so in this case let's just look at a general stock Corporation you can see it's $100 to file it so you can see it's more expensive if you recall $70 to file the LLC $100 to file uh a corporation okay here's this is this is basically the same as you saw for the LLC so you have to read it and say that you've read it okay submitter um is is is just you okay I'm not going to go through putting in all

[48:49] the information again okay was a name reserved for this filing no okay or if it was yes okay here's the address this is see this remember this is just like the LLC okay now um are there directors to be named in these articles of Corporation generally speaking the answer is no but if there are so then you'll list the directors okay now you say wait a minute don't all corporations have to have directors yes they do um when you file your statement of information for the Corporation after it's approved you're going to have to

[49:24] name at least one director there but you don't have to name a director in your Articles of Incorporation um and typically you won't okay agent for service of process exactly the same as for the LLC okay um total number of shares the corporation is authorized to issue this is something you'll want to talk to your accountant and or attorney about okay does the corporation have more than one class or series of shares generally speaking the answer will be no but you might okay you might have voting and non- voting shares for example because that will impact um how who

[50:00] controls the corporation okay the file date current date is most common but again you could file it with a future date just like with the LLC okay attachments if there are any fine if not go on review it okay and and you see here here's where all the information would be just like with the LLC okay and then filing is there going to be one signature or multiple sign atures okay and then you know again do you want a certified copy okay what kind of processing standard whatever okay and

[50:35] then you'll you'll file you'll you'll sign it and file it just just like before okay so you can see the process is very similar the questions are a little bit different um and and um a little bit more complex and if you are considering a corporation you're you you um most definitely need to talk to a lawyer um even if you're going to file it yourself talk to the lawyer about the various questions that you're going to have to answer okay get your lawyer's advice and then go ahead and then just

[51:10] like with the LLC once once you've submitted it it it'll take typically a couple of weeks for the Secretary of State to approve it once you have the Articles of Incorporation approved then you will you'll need to file your statement of information which I'm not going to go back it works the same as for an LLC except for you're doing it for a corporation you'll need to name your at least one director you'll need to uh name a CEO and a CFO and a secretary okay those three officers are required for a California Corporation

[51:47] okay and then you'll file that statement of information and then then then you know you're done with that part now there's a a couple of there's one other thing that you're going to need to do and I'm going to I'm going to show you this uh quickly here before we we run out of time okay so go back to this um you want to get a federal tax ID number okay or an Fe number okay now notice here it says irx tax number.org here you're this is a service where you

[52:23] do it and you pay for it you can go right to the irs's website see here irs.gov employer ID numbers just click there okay alert you must complete an EIN application individually instead of using any automated process okay and and you can file it online so you apply for an EIN online there's no cost for doing this okay determine your eligibility so if you're whether you're a sole proprietor an L LC or a corporation you want to have an EIN

[52:58] number now if you're a sole proprietor you're actually getting an EIN number for yourself okay but you're gonna everything your business does um needs to be done under that EIN number to keep it separate from yourself so you could for example um get credit under the EIN number for the business and that will give you a separate business credit file from your own okay understand the online application Okay blah blah blah blah so you just click on apply online okay okay da da begin application

[53:37] okay and here you go soulle proprietor Partnerships corporations including s corporations limited liability companies Estates trusts and then there's additional ones so let's just do soulle proprietor just so you can see how this works it works pretty much the same for all of them okay so are you a soulle proprietor mean meaning you have a business or are you doing this because you're employing household help Okay so let's you're a sole proprietor because you're doing it for a business okay confirm um your selection of so proprietor okay a so proprietor you have only one number of businesses okay

[54:12] that's what I just explained okay now why are you getting the EIN number have you started a new business or did you hire employees do you need it to open your bank accounts okay change type of organization purchase an active business you know in this case we started a new business that's you know if you have any questions about this talk to your accountant first okay and then you'll put in your information in this case Kevin oops beml okay if a suffix no I'm not going to put my my social security

[54:47] number but you'll put your social security number in here okay I'm just gonna see if this will work I'll just put in zeros okay I'm a sole propri you know you're doing it yourself now a third party can also do this on your behalf okay continue oh okay okay they're not able to they're not able to process because I put in triple zero okay well so you'll um okay thank you for all right so You' put in your social security number it's going to ask you a couple of more questions and then basically it's it's

[55:22] going to process your application for EIN number okay if I had put in my own social security number um uh it would have it would have told me you already have an e number because when I started my very first business it was a sole proprietorship and I I got an EIN number way back then we're going back to 1986 um but anyway you can file it and then you'll click submit and what'll happen is it'll process it and you'll be able to download a PDF letter and in the upper uh right hand corner of the letter it'll have your EIN number now they used

[55:59] to be called 95 numbers because in the old days an EIN number always started with a number 95 now what's happened over the decades is there's been so many of them that there weren't enough 95 numbers to go around and so now it can be it can start with any kind of number um but in any event before you open your business bank account um you're going to need an EIN number um you're absolutely going to need it if if you're if you have an uh an entity other than a sole proprietorship because that entity needs to have a tax identification number even

[56:34] as a sole proprietor though um you may want to have your you know an EIN number for your business again talk to your accountant about that and and and get your accountant's advice okay and and then those are the basic documents that you need in order to set up your business now if you are are going to do a an escorp a sub chapter escorp just like um you could file the application for an EIN number online through the irs's website you can do the same thing for well it's not exactly the same but

[57:10] you can download a form to file as to file for a sub chapter S designation for your corporation and then you you interestingly enough you fax or mail in the form you would think these days you could file it online but for some reason you can't do that form online now maybe an accountant can um but as an individual person um I was I wasn't able to do that um so I just I got an eax account for free for three days submitted it you know and then and then you know got rid of the EAC so it didn't

[57:45] cost me anything um that that's the first time I've had to fact something in years and I can't imagine I'm going to have to fact something again in the near future so so that's that's what you do um and again you know whether you have a CCP or an S corp that's something you're going to want to talk to your accountant about um and um that's not something to decide on your own if you're if you're especially if you're inexperienced okay um but but you can see that all of these systems are really simple these days it's all all

[58:21] online um and you just follow it along and the thing is if you're doing this and you have any questions so um it's not a big deal even if you have to start over again you've maybe only spent 10 or 15 minutes so you know just write your questions down give your accountant or your lawyer a call say hey I was filing my fictitious business name statement I was filing for my Ein I had it asked me this question I didn't know what to answer what do I say you know and and um it'll it'll be a good experience you know if if you if you do it um working

[58:56] with your advisers um and and it'll help you be a you know a better business administrator certainly so that's what I've got for you today I know was a lot of information um hopefully you found it useful and um if you watch my show for any length of time you know that I'm a big proponent of of people having their own businesses nothing wrong with working for someone else um but there's nothing like having your own business and and and really having the opportunity to Garner your own success

[59:32] so if you have um any questions uh for me um feel free to post them on our social media if they're general questions if you have a specific question feel free to email me all those links will be in the show notes after the episode posts um now please don't expect me to give you accounting or legal advice because I'm not going to do that I'm happy to give you business advice because that that is my business um but you know and you can ask me the question but just be aware that I may say to you well this is something you need to talk to your accountant about or

[60:07] this is something I recommend you talk to your attorney about okay so um if I if I do that please please don't get upset I'm I'm doing this you know to to give you the maximum amount of help and I'm I'm not trying to charge you you know I'm not trying to force you to you know spend a lot of money doing this but a little bit of money spent at the beginning will be a very good investment to your business success so thanks for tuning in today hope you enjoyed the show uh this is this this is our my last show for this week so um uh starting

[60:42] next week on Monday at 10: am is trust and Estates weekly on Tuesday at 10: am is business lessons from the military and then a week from today at 10: a.m. all Pacific time is the next episode of people making money so wishing you a wonderful rest of the day and a wonderful rest of the week that's kind of hard to say isn't it um and look thanking you for joining me if you join me more than one show tonight this week thank you especially and uh wish and wishing you all the best and hoping to see you next week signing off Marie

[61:17] darling you are my bell all the best folks