I’ve always been one that is not at all comfortable relying upon a single source of financial well being. Since the early 80’s in one form or another I’ve owned and operated a business.
Early on I have a little Electronics sales business selling Cell Phones to the well-healed during it’s hayday. It was fantastic. Hardly work, get paid well, and live La Vita Loca.
I’d take a number of odd jobs during that time, driving computer mag tapes around Silicon Valley, installing car audio systems, systems administrator for a large multi-national corporation, Y2K mitigation for a number of organizations (not the least strange of which was the California Department of Corrections).
At any rate, as I said, I’m not one that’s comfortable with a single source of income, so I’ve been investigating business structures to determine what my next organization will look like.
I have plenty of experience being the President and CEO of a corporation, having ran one from 2000 to 2006. The structure offers a lot of advantages, such as dividing income between corporate tax concerns and personal tax concerns. Corporations also have the advantage of having ownership interest in other organizations. But there are also some disadvantages, not the least of which is very strict requirements and regulations on annual meeting, IRS and state tax filings, additional book keeping to track basis and stock ownership (plus managing different classes of stock).
I was really more of a burden than a blessing to myself, which is to a large degree why I terminated operation in 2006 and became a W-2 wage slave.
Since that time a number of interesting ideas have popped into my head. One of which are some software product ideas for the iPhone.
My intent at this point is to move forward on development of 2 concepts. One of which will have a pretty limited market, the other, I hope, to have a much wider market, and is a type of social networking application. The second of which I hope to see wide spread usage. The plan, is for the first app to fund development of the second. That is the plan.
Before I cut my first line of code, I wanted to know what type of organization I wanted to create. I need to have my business licenses in place, before I complete the Apple Developers Contract. They are quite clear that it won’t be approved for any shoddily / hastily created pseudo-company.
I’ve done some reason on the Secretary of State’s website, checked a few of the fee structures, and such, but my primary source of research on the business organization from has been from the book “LLC or Corporation – How to Choose the Right Form for Your Business“. Author is Anthony Mancuso, Attorney.
It’s not a long read, about 250 pages, which I spend the last 5 evenings digesting. It’s rather repetitive, which was a little frustrating for me, initially. However, having completed the book I can understand at least one reason for it’s repetitive nature. If anyone were to pick up the book and *not* read the entire thing (why would you do that, well, sometimes I’ve been guilty of poaching the parts of books I need without taking the time to digest the entire tome) they would still get the frame of reference required to get useful information on the topic of interest. I’d say, it’s a modern writing method for the more ADHD nature of our society. In the end, it’s worth dealing with the repetitiveness. It has it’s place.
Another helpful part of this book is extensive use of examples. More than once I’d read the example 2-3 times to really grok the point, and that was very helpful. The last chapter is also dedicated to some ‘real-world-ish’ examples of business formation decision making. All in all, it was well worth the $25.00 price tag.
So, what did I decide to do? Well, an LLC is the type that I’ve decided to select for a number of reasons, but the primary ones I’ll list here:
- Simplicity of formation
- Limited personal liability for company debt
- Pass-through tax advantages (this sword cuts both ways though)
- Fewer operational requirements (no board of directors, meetings, etc.)
- Simpler tracking of each owners basis in the company
So, with my new company name selected, and my form of business decided, it’s time to move forward with foundation of the company.
You know I’ll be sure to post information on that once the State registration has been completed any my licenses granted, EIN number acquired, and finally the domain names registered.
