Success in Incorporating Small Businesses: (Twelve Cardinal Steps to Establish a Business in New York)

By Sushil Kumar

Every year hundreds of new businesses are started. Sadly very few will actually survive beyond the start-up phase. One reason they fail is that the entrepreneurs behind these businesses dont fully understand the importance of the accounting and tax aspects of their business.
Sushil Kumar, CPA, walks you through the steps in the life of a business and gives you twelve cardinal astonishingly simple, foolproof steps to laying the foundation for entity structure planning, detailed business planning, and tax compliance. Whether you are presently running your own business or just planning to start one, this book is a must-have. Theres a lot of information packed in the fun, enlightening, classic book, written specifically for New York small-business owner. Written in a personable and easy-to-understand style, this book covers everything youd want to know to take control of your business and be a success.
All the chapters are important but I would more weight on chapter twelve. This is a list of surefire attributes to figure for yourself whether you belong in the world of business.
There is also a check list of things to do to run a successful business in the New York region, which is part of Annex I.

• Language: English
• Publisher: AuthorHouse
• Release date: Feb 11, 2014
• ISBN: 9781491835722

Book preview

© 2014 Sushil Kumar, CPA, MBA, CGMA. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or

transmitted by any means without the written permission of the author.

Published by AuthorHouse 04/21/2014

ISBN: 978-1-4918-3573-9 (sc)

ISBN: 978-1-4918-3572-2 (e)

Any people depicted in stock imagery provided by Thinkstock are models,

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of the author and do not necessarily reflect the views of the publisher,

and the publisher hereby disclaims any responsibility for them.

Contents

Chapter 1

Selecting a Legal Entity

Chapter 2

Registering with the Tax Authorities

Chapter 3

Trademarks and Copyrights

Chapter 4

Banking

Chapter 5

Federal and State Payroll Taxes

Chapter 6

Income Taxes

Chapter 7

Accounting and Bookkeeping

Chapter 8

Cash Management

Chapter 9

Financing Your Business

Chapter 10

Insurance

Chapter 11

Selecting Professional Advisers

Chapter 12

Traits of a Successful Business Owner

Appendix 1

Checklist to Start a Successful Business

Appendix 2

Response to Self-Talk

This book is dedicated to my teachers, family,

clients, and staff, who have all been a blessing to

me and inspire me to reach greater heights.

Introduction

Congratulations on your new business.

I wish you every success!

I have written this Success in Incorporating Small Businesses to provide you with basic information about the financial, tax, and accounting considerations of starting a new business.

The purpose of this book is twofold. The first is to help you focus on the decision of whether to incorporate and the best way to accomplish it. I personally believe that in business today it is almost a necessity that you be incorporated. I would say this mainly based on the belief that our society has become overly litigious. Those who enter into business must face the fact that sooner or later someone will sue them or their business for something. If you do not have a corporate structure, you will expose yourself and possibly your entire family’s assets to the plaintiff in the suit. The corporation is the single most important tool to protect from liability. Incorporation is a great tool from income tax perspective, audit exposure and succession planning.

The second objective of this book is to convey to you the legalities of creating an actual business operation. Operating a business is highly regulated proposition. You have to understand a little about business law to learn to spot potential problems. You may not actually handle the problem yourself, but by understanding some of the legal implications, you will be able to use your accountant and attorney better leverage in dealing with legal tax problems.

Each year hundreds of thousands of corporations are registered in this country, tens of thousands in New York alone.

Many new businesses fail in the early years from poor management and lack of attention to financial basics such as record keeping and reporting. That’s where we come in—we want to be part of your team to make sure you have in place the things that will allow you to enjoy ongoing success.

Having a team of outside advisors is important—including a CPA, lawyer, bank manager, and insurance agent. Make sure your advisers are willing to be engaged and proactive in helping you. You don’t need spectators—you need coaches!

Trinity Tax & Financial Solutions Inc. CPAs has been active in the New York area since the 1990s. We specialize in four areas:

1. Helping individuals and families with tax compliance and tax planning.

2. Helping owner-managed businesses with their accounting, tax, and consulting needs so that they can focus on running their businesses.

3. Helping individuals and families with comprehensive, holistic wealth management so that they can achieve financial independence and meet their life objectives.

4. Helping expatriate individuals and families with their tax issues. This may involve Americans living abroad or, more often, citizens of other countries living in the United States, either permanently or temporarily on various types of visas. This is a complex area and requires careful planning and compliance.

I would appreciate the opportunity to meet with you either at our office or yours—we are pleased to offer a one-hour complimentary consultation meeting.

Sincerely,

Sushil Kumar

Sushil Kumar, CPA, MBA, CGMA

PS: Call us for a free one-hour initial consultation without obligation.

Please note: While every effort has been made to provide the most up-to-date information, legislation does change. Please contact Sushil Kumar for the latest rates and IRS legislative updates.

CHAPTER 1

SELECTING A LEGAL ENTITY

Triumph is just a lot of umph added to try.

Marvin Phillips

CHAPTER 1

Selecting a Legal Entity

Congratulations on being in business! One of the first things you will need to decide is what kind of legal entity you are going to use to conduct your activities. The decision depends on the following:

• How you intend to finance your business

• The amount of personal risk you are willing to bear

• Taxation

• Who else is involved—partners, shareholders

• Any legal restrictions

• Exit policy

There are a number of options, which are discussed below. This decision will have a significant impact on the way you are protected under the law and the way you are affected by income tax rules and regulations. Each type of legal entity has its benefits and drawbacks, and each is treated differently for legal and tax purposes.

There are five basic forms of business organizations:

1. Sole Proprietorship

A sole proprietorship is a business owned and operated by an individual or a married couple. It is not considered to be a legal entity in its own right but rather an extension of the individual or individuals who own it. The business owner owns the business assets personally and is responsible for the debts or other liabilities of the business. The income or loss from a sole proprietorship is combined with the other earnings of an individual (or married couple) for income tax purposes.

A sole proprietorship is the simplest form of business to own and operate because it does not require any specific legal organization. It just needs to obtain any required licenses or permits.

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