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Starting my own company?

Discussion in 'General Discussions - USA & Canada' started by sonal, Jun 30, 2005.

  1. sonal

    sonal Junior IL'ite

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    Myself and my husband would like to start a company here in the US. But there is one small problem - we have no idea where to start!

    Can someone help us here?

     
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  2. indira

    indira Junior IL'ite

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    Great step!

    Sonal,

    We just finished incorporting a company after researching this subject for 9 months!!. I can try to help as much as possible.

    When myself and my husband started thinking about starting a company, there was no place we could go for advice/tip specific to Indians. All we could find were the standard information that would be mostly relevant for Americans. We had to spend hours trying to figure out things on our own. So, lets make this thread comprehensive and useful for fellow ladies/couples who might be considering this path in future.

    My first question to you is ..
    "Why do you want to incorporate?"

    Can't you achieve your objectives without incorporation?
     
    Last edited: Jul 1, 2005
  3. sonal

    sonal Junior IL'ite

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    Bodyshopping/Software Development

    Hi Indira,

    Thank you for the response. Many of my friends would also like to know more about starting a company in the US. If we make this thread informative, they will find it useful as well.

    My husband works in the IT dept at Ford, Michigan for the past 9 years. Using his contacts within Ford, he feels that he would be able to place a few IT engineers. He needs to have an official US registered company through which he can do such body shopping work. If it goes well, he has friends in GM/Chrysler through whom he can expand.

    Secondly, he also comes across opportunities for software development in companies in and around Michigan. He would like to take those projects and get them executed using software engineers in India. He needs an official US registered company to bid for those projects and get paid for it.

    Hope this clarifies my situation. Look forward to guidance. Thanks.
     
  4. nilam

    nilam New IL'ite

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    request

    hi sonal,
    i read ur post...u doing good work....
    i completed Bachelor Degree In Computer,If you want any help related to programming i will help you.....as volunteer .....i just want to help u.
    nilam
     
  5. indira

    indira Junior IL'ite

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    What form of company?

    Sonal,

    The reason we registered a company was for slightly different reason. Looking at your needs it appears that you need to register a company.

    Now you need to decide what "form" of a company you want to incorporate:

    a. A Corporation or
    b. A LLC (Limited Liability Company)

    The big difference between both is that if you form a corporation, you pay taxes at the company level. If you form a LLC, you pay taxes at the individual level. LLC has a less formal reporting requirements compared to a corporation. Raising capital from others, transferring ownership, adding investors etc are easier with a corporation.

    Depending on your situation, you need to decide on a form of incorporation before proceeding further. Unless you have strong reasons for starting an LLC, most people prefer to register a corporation.

    Indira.
     
  6. sheetal

    sheetal New IL'ite

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    Indira, can you explain the above? I am not able to understand. Thank you for your time.

    S
     
  7. indira

    indira Junior IL'ite

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    Difference between incorporation and LLC.

    Hi Sheetal,

    It is easier to explain with an example.

    Lets us say that you are working in big company earning a good salary. You also have a company on your own through which you do consulting work as secondary income. During a year, lets say you made a salary income of $50,000. In the same year, your company made $25000 profits.

    Assume that corporate income tax is 20% and personal income tax is 25%.

    If you have formed your consulting company as a corporation, then taxes will work this way.
    $25,000 - 20% = $20,000 (After corporate tax)
    ($20,000 + $50,000) - 25% = $52,500 (after personal tax)


    If you have formed an LLC, then taxes wil work this way..
    (25,000 + $50,000) - 25% = $56250 (after personal tax)
    As you see, there is no corporate tax. Profits made by your LLC is passed through to you and you pay personal income tax on it.

    One is not always better than the other. Which is better depends on your tax situation.

    Indira
     
  8. sheetal

    sheetal New IL'ite

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    Which registering company?

    Hi Indira,

    Thanks for taking the time to provide a numerical example. We are now pretty close to making a decision and think that we need to incorporate a company here in the US. Can you please tell which company you used for incorporation and how was your experience?
     
  9. indira

    indira Junior IL'ite

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    MyCorporation

    Hi Sheetal,

    Yeah, absolutely. We used MyCorporation.com for registering our company. They were very professional and thorough. The website is pretty self explanatory on everything you need. They also have an online tool that will provide you estimates and you can decide for yourself which service to add and which one to drop.

    I would take the service of asking mycorporation to obtain the Federal Employer ID Number (not just prepare). It is one less headache that you need to deal with and pretty affordable too.

    Let me know if you need further help. Best of luck!

    Indira
     
    Last edited by a moderator: Sep 27, 2005

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