The rapid advancement of technology has made the access to information easier than it has ever been before. As a result, many more people have been able to successfully convert their business ideas into actual businesses. However, bringing an idea to life is no easy task even with all the technology the world has to offer.
Entrepreneurship is a path fraught with risk. There are far too many moving parts involved in any new business venture, and managing them all is key to ensure the success of your idea. One such moving part is the legal establishment of the entity you get to call your own company.
In this article, we will address some fundamental questions and list out the various steps involved in setting up your own company. Here’s what you can expect to read further:
- Difference between Business and Company
- Who should Set Up a Company?
- How to Start Your Own Company
- Risk of Starting Your Own Company
Bring out your pen and notepad, here we go!
Difference between Business and Company
More often than not, people use the terms ‘business’ and ‘company’ interchangeably. However, the two are entirely different in very crucial ways. The biggest difference between a business and a company lies in the legal and financial structures of the two.
Legally speaking, a business need not be a registered entity at all. It can refer to a simple, informal setup put in place by a private citizen without any documentation to back it up. People often mistake this with a company because in essence, the two could be engaged in exactly the same economic activity. However, a company is a legally recognized entity that is subject to very clear regulations regarding its structure and finances.
What structure a company is expected to follow depends on the type of company it is registered as. The same is true of the legal regulations applicable to it.
Both ‘business’ and ‘company’ may refer to a large variety of organizations with various types of structures and ways of functioning. There are many kinds of companies in the US, the most popular ones being:
- Limited Liability Companies
- C Corporations
- S Corporations
- Non-profit Companies
Swyft Filings is a company best known for its ability to help you set up each of these types of companies and many more. But before you head on over to their website and get your company registered, take a moment to look through the next section.
Who Should Set Up a Company?
Yes, that’s right — having business ideas is not enough reason to go about setting up companies.
It’s best to make sure you will actually benefit from doing so before you start your own company. Even though Swyft Filings really simplifies the process of creating and registering your own company, starting a company is not something you take lightly. Once a company is registered, it becomes subject to accounting and taxation requirements that can cost you dearly if you haven’t thought this through first.
You should only consider setting up a company if:
- You have an existing business setup that you’re looking to formalize;
- You want to protect your personal financial assets against business risks;
- You plan to handle intellectual property rights that are not your own; or
- You are looking to get funded.
Forming or registering a company signifies your commitment to your business. It makes you subject to laws, rules, and regulations that you may hitherto be unaware of. So, consult with a lawyer or an accountant who can advise you on whether your condition will be improved or worsened by forming a company before you register one.
Once you’ve gotten all the information you need and made up your mind to start a new company, move on to the next step.
How to Start Your Own Company
The process of starting a new company has never been easier than it is if you do it via Swyft Filings. When you want to register your company, you have to go through five basic steps.
- Provide Your Information
You will need to provide Swyft Filings with information about the company you want to start. The nature of this information can change, depending on which state you want to register your company in.
Typically, you will need to chart out a company name, the nature of business you plan to do, an official address, and the scope of your business. However, you may need to provide more information based on the requirements of the State you’re in.
Once you provide this information and any necessary supporting documents, you move on to the next step.
- Pick a Business Name
Choosing a company name is much like picking a username online: you get to call yourself whatever you want as long as nobody else is already using that name. Well, only a part of that is accurate – you do have restrictions on what you can and cannot call your company, too. These restrictions may have some variations across states but they are mostly along the same lines.
But just like picking usernames online, you may need to try multiple variations of your preferred company name. If someone else is already using the name you want, you cannot call yourself the same thing. So, be mentally prepared with a few options.
- File Your Documents
This is usually the most tedious part of setting up your own company. It involves liaising with a wide array of government agencies to get all your paperwork sorted out.
There is a lot of scope to mess things up while filing your documents if you don’t know exactly what you’re doing. Unless you’re confident about doing this part on your own, it makes sense to hire experts like Swyft Filings who can take care of your paperwork for you.
- Get State Approval
For the most part, once your name is confirmed and paperwork filed, it’s a waiting game till the state government agencies approve your application. Without experts by your side to handle this, you may end up running around trying to get approval long after the actual approval is given.
It’s wise to leave all this following-up to the experts and focus on running and scaling your business up. Swyft Filings will notify you as soon as your application is approved by the state and your company is legally incorporated.
- Set Up Compliance Systems
As mentioned earlier, once your company is incorporated, you become subject to a wide array of rules and regulations. A lot of these require you to immediately put in place some systems to ensure you don’t get into any trouble with the law. If you are unfamiliar with the details of what you need to do for compliance, don’t fret — Swyft Filings offers dedicated support services to help you get everything up and running.
Once you’ve completed these five steps – voila! Your company is officially created.
Benefits of Starting Your Own Company
We mentioned in the previous sections that setting up your own company is no easy matter, but it can definitely be worth all the time and effort you put into it.
Here are a few advantages of incorporating your company:
- Tax Benefits
The taxes you pay or are exempted from paying as a private citizen are very different from what’s expected of you as a company. Accordingly, the tax benefits unavailable to private citizens are made available to you as a business owner.
- Safeguarded Company Lifespan
Succession management is one of the biggest challenges of running informal businesses. Incorporating your own company ensures that the company will continue to exist and function well even in your absence.
- Financial Protection
The moment a company is incorporated, the financial burden of keeping it running no longer rests solely on your shoulders. That way, even if something is to go wrong with your company’s finances, your personal assets remain safely uninvolved in the matter.
- Credibility Boost
Last but not least is the fact that incorporated companies lend your business far more confidence and credibility than the average informal business can get on its own. From investors to potential consumers, everyone is more likely to trust you if your company is a legally registered entity. There’s no price tag that can prove how valuable this can be in the long run.
Starting your own company comes with a slew of challenges and complications inherent to the process. Unless you’re prepared to navigate that system to figure out your own way, it makes sense to take professional help in making this happen.
We hope this article has proved useful and informative!