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New Business Start-up Checklist

1. The first thing to do is to decide what kind of business this will be; what the product or service is going to be exactly; how it is going to be promoted and how it will be delivered.
2. Next you need to work out the kind of business entity. The usual choices are SOLE PROPRIETORSHIP, CORPORATION, "S" CORPORATION, or LIMITED LIABILITY COMPANY (LLC).
     •   A Sole Proprietorship is a company that is owned and, usually, operated by an individual. It has not been organized in such a way as to be separate from its owner. The owner and the company are a single entity in the eyes of the law and the tax man. The tax man also charges the owner Self Employment Tax which is the equivalent of Social Security and Medicare Taxes--both employer and employee rates added together. This totals about 15% added to the owner's income tax.
     •   A Corporation is a legally organized entity which is entirely separate from its owners in terms of assets and liabilities. It pays its own taxes, owns possessions and is responsible for its own bills. The owners are Shareholders and may receive Dividends when the Corporation makes profits and wants to reward its investors.
     •   An "S" Corporation is a special kind of Corporation for small businesses ("S" is for "small"). This corporate organization allows the owner(s) to benefit from the profits of the company without the penalty of double taxation which occurs with a regular corporation. A regular Corporation pays taxes on its profits and, when it pays dividends, its Shareholders are taxed again to the extent that the dividends add to their personal income. The "S" Corporation does not pay its own taxes. All profits from the S Corporation are passed on to the Shareholders and they pay their regular income tax on them. However, in order to qualify, the Shareholders must be employees of the S Corporation and must be paid some kind of salary with the usual payroll taxes.
     •   A Limited Liability Company is similar to an S Corporation but organized internally more like a partnership than a Corporation. The owners/partners share in profits like an S Corporation and are protected from the liabilities of the company by their LLC start-up agreement. The LLC start-up should be done by an attorney familiar with them as the paperwork is quite complex. (Well, at least it is beyond me! GVS)
3. Decide what you are going to name your company. Before you get too excited about the name you choose, have a name search done by the Secretary of State to be sure the name isn't already being used by someone else. If you want to take a risk, you can try and register it without the search but if you do this, at least check the phone book for the name first. To have a search done, visit the Colorado Department of Revenue website at www.revenue.state.co.us or call the Secretary of State's office listed in the blue pages of the phone book.
4. Register your company with the State of Colorado. To do this, Colorado has an all-in-one form called CR100 which you can fill out and submit or download from the Internet at www.revenue.state.co.us or obtain by visiting one of the Colorado Department of Revenue offices. This form registers your name with the Secretary of State, opens your Wage Withholding and/or Sales Tax Accounts and opens your State Unemployment Tax Account.
5. Register your company with the Internal Revenue Service. This is done by completing an SS-4 Form which you can download from the Internet at www.irs.gov and follow the directions for finding and downloading forms or get one from the
   IRS office in Denver or your local library may have them. This form gets you set up to do payroll taxes and pay them in and gives your company a Federal ID number.
6. Open a bank account for your company. Mixing up your personal and business funds in one checking account is a real bad idea. Get your company its own checking account and start it out with a clean slate and good records.
7. Go to work! If you are not already busy with work to do, get some and do it. Work for fast, fast, fast delivery of your service or product and keep it moving. Add quality as you go and your new business will make it.
8. Organize. Read the rest of this newsletter for information on files and what you need to keep track of in terms of income and expense. You can also purchase a good bookkeeping software program for your computer (QuickBooks, MYOB, etc.) which will do a lot of the work for you. Our QuickBooks program does the quarterly tax forms and can be set up to shove the annual numbers over to a tax program!
9. Call Admin Power for help when you need it. We do bookkeeping, payroll and payroll taxes, tax returns for individuals and corporations and consulting to help you make your business a success.