Have you given consideration to what business entity structure is best for your business? For many entrepreneurs, a Limited Liability Company—commonly referred to as an LLC—is the ideal choice. If an LLC is right for you then complete this checklist and you’ll be in business.
1. Register With the Secretary of State in the State(s) where you’ll do business: For Montana you can find more information and the necessary forms to file here:
http://sos.mt.gov/business/Forms/
Or call them: (406) 444-2034
But before you file paperwork, check to make sure your desired business name is available. (If the name you desire is already in use then your paperwork will be rejected.)
You can do that here: https://app.mt.gov/bes/
If your paperwork is rejected by the State it will be sent back to you for revision. You’ll need to submit a refilling fee, which is 50% of the original fee. Checking to make sure your business name is available could help you avoid need to be resubmit your application. I suggest calling the Montana Secretary of State Business office with any questions you may have before filing your paperwork. Sometimes this process can be tedious. For hassle-free filing Mill Creek Accounting Services can prepare and file paperwork on your behalf.
2. Open Bank Accounts:
Once your LLC has been approved by the Secretary of State it’s time to set up a business checking account. Bring your LLC documentation from the State to the bank or credit union of your choice, and ask to set up a business checking account. No, you do not need an Employee Identification Number—commonly referred to as an EIN—to open a bank account. You can use your social security number instead. This is known as a single member LLC.
Using a business bank account is critical to the financial well-being of your company. Until this process is finalized, make sure to keep track of all personal funds used to make business purchases. Also, keep your receipts. It is important to separate your business finances from your personal finances as soon as possible. It will make your accountant happy, and it will strengthen your limited liability protection. Co-mingling funds is a sure fire way to lose the risk protections offered by the entity you have formed.
3. Seed Bank Account With Start Up Capital:
Deposit your start up funds into your business bank account. These funds may come from a business loan, an investor or your own personal capital.
4. Obtain Your Domain Name:
Mill Creek Accounting Services highly recommends purchasing your website domain name ASAP once your business name is approved by the State. Once you have purchased your domain name you can use it to create business email addresses for you and any employees. It is good to have your business communications branded from the beginning, especially for sensitive matters.
5. Build Accounting Model:
Now it’s time to set up an accounting system so that you can record your business activity. For example, how will you charge people?
Consider things like:
Will you charge a flat rate? Or, an hourly rate?
Is this a hard money contract—or a time & material project?
Do you sell products with markups? If so—how will you determine the markup?
What payments will you accept—and how?
Will you need to run an accounts payable system?
You may also need to be setup to handle “job costing” which is defined as determining the profitability of a single project.
6. Determine Company’s Assets:
Make sure your company’s assets are reflected on the balance sheet.
A company’s asset is defined as something that has long-term benefit to the company. . Examples include: bank accounts and certain purchases like furniture or office equipment. Fixed assets such as equipment, furniture, and computers, etc., should be reflected on the balance sheet. Remember these types of assets have to be depreciated over time. The good news is, “effective for taxable years beginning on or after January 1, 2016, The IRS in Notice 2015-82 increased the de minimis safe harbor threshold from $500 to $2500 per invoice or item . . .” This means purchases up to $2,500 can be deducted as an expense in the tax year of purchase, rather than be capitalized and depreciated over multiple years.
This is just barely scratching the surface of section 263(a) of the IRC, if you would like to know more, give me a call.
You have completed the checklist! But—the work has just begun. Now, run the system, evaluate your experience and make tweaks where necessary. And give Mill Creek Accounting Services a call!
Contact Robert at: Robert@millcreekaccounting.com
Phone: 406-926-1057
Mill Creek Accounting Services, LLC was founded with the mission to provide a resource for accounting services to Missoula and its surrounding area organizations. Mill Creek Accounting Services have seen it over and over again, when institutions focus purely on their production and service needs, while they neglected their accounting systems. The results spoke for themselves: unreliable financial information, slow invoicing and payment collections, strained relationships, and crushing stress on owners and staff. There is a better way to do business!
Click here to learn more: www.millcreekaccounting.com. You can schedule a complimentary consultation for your small business in Missoula, MT.
1. Register With the Secretary of State in the State(s) where you’ll do business: For Montana you can find more information and the necessary forms to file here:
http://sos.mt.gov/business/Forms/
Or call them: (406) 444-2034
But before you file paperwork, check to make sure your desired business name is available. (If the name you desire is already in use then your paperwork will be rejected.)
You can do that here: https://app.mt.gov/bes/
If your paperwork is rejected by the State it will be sent back to you for revision. You’ll need to submit a refilling fee, which is 50% of the original fee. Checking to make sure your business name is available could help you avoid need to be resubmit your application. I suggest calling the Montana Secretary of State Business office with any questions you may have before filing your paperwork. Sometimes this process can be tedious. For hassle-free filing Mill Creek Accounting Services can prepare and file paperwork on your behalf.
2. Open Bank Accounts:
Once your LLC has been approved by the Secretary of State it’s time to set up a business checking account. Bring your LLC documentation from the State to the bank or credit union of your choice, and ask to set up a business checking account. No, you do not need an Employee Identification Number—commonly referred to as an EIN—to open a bank account. You can use your social security number instead. This is known as a single member LLC.
Using a business bank account is critical to the financial well-being of your company. Until this process is finalized, make sure to keep track of all personal funds used to make business purchases. Also, keep your receipts. It is important to separate your business finances from your personal finances as soon as possible. It will make your accountant happy, and it will strengthen your limited liability protection. Co-mingling funds is a sure fire way to lose the risk protections offered by the entity you have formed.
3. Seed Bank Account With Start Up Capital:
Deposit your start up funds into your business bank account. These funds may come from a business loan, an investor or your own personal capital.
4. Obtain Your Domain Name:
Mill Creek Accounting Services highly recommends purchasing your website domain name ASAP once your business name is approved by the State. Once you have purchased your domain name you can use it to create business email addresses for you and any employees. It is good to have your business communications branded from the beginning, especially for sensitive matters.
5. Build Accounting Model:
Now it’s time to set up an accounting system so that you can record your business activity. For example, how will you charge people?
Consider things like:
Will you charge a flat rate? Or, an hourly rate?
Is this a hard money contract—or a time & material project?
Do you sell products with markups? If so—how will you determine the markup?
What payments will you accept—and how?
Will you need to run an accounts payable system?
You may also need to be setup to handle “job costing” which is defined as determining the profitability of a single project.
6. Determine Company’s Assets:
Make sure your company’s assets are reflected on the balance sheet.
A company’s asset is defined as something that has long-term benefit to the company. . Examples include: bank accounts and certain purchases like furniture or office equipment. Fixed assets such as equipment, furniture, and computers, etc., should be reflected on the balance sheet. Remember these types of assets have to be depreciated over time. The good news is, “effective for taxable years beginning on or after January 1, 2016, The IRS in Notice 2015-82 increased the de minimis safe harbor threshold from $500 to $2500 per invoice or item . . .” This means purchases up to $2,500 can be deducted as an expense in the tax year of purchase, rather than be capitalized and depreciated over multiple years.
This is just barely scratching the surface of section 263(a) of the IRC, if you would like to know more, give me a call.
You have completed the checklist! But—the work has just begun. Now, run the system, evaluate your experience and make tweaks where necessary. And give Mill Creek Accounting Services a call!
Contact Robert at: Robert@millcreekaccounting.com
Phone: 406-926-1057
Mill Creek Accounting Services, LLC was founded with the mission to provide a resource for accounting services to Missoula and its surrounding area organizations. Mill Creek Accounting Services have seen it over and over again, when institutions focus purely on their production and service needs, while they neglected their accounting systems. The results spoke for themselves: unreliable financial information, slow invoicing and payment collections, strained relationships, and crushing stress on owners and staff. There is a better way to do business!
Click here to learn more: www.millcreekaccounting.com. You can schedule a complimentary consultation for your small business in Missoula, MT.