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If you’re thinking of starting a business, one of the first things to consider is your business structure. A corporation is a legal entity that separates its assets and liabilities from those of its owners, called shareholders. This means that if the corporation goes bankrupt, it cannot take down the personal finances of its shareholders with it. Corporations also provide limited liability protection for their shareholders—if someone sues you as an individual shareholder, they can only go after your shareholdings in the company’s assets.
The best choice for a cleaning business is the C-corporation structure. C corporations are also known as regular corporations, which means they are taxed separately from their owners and shareholders. This separation protects individual owners from being held personally liable for corporate debts or other obligations incurred by the company. In addition to its liability protection benefits, this type of corporate structure gives shareholders more control over their businesses than other types of entities.
The second best option would be an S corporation; these are similar to C corporations in that they provide limited personal liability protection and give shareholders significant control over operations. They differ only in that they pay taxes at the individual level rather than at the corporate level—which means more money goes straight into your pocket as an owner!
Now that you’ve decided to form a C-corporation, the next step is registering your business with the state. You’ll need to register your name, pay fees, and file paperwork at your local government offices. The process usually takes about 3 weeks.
If you’re an independent contractor, it’s not required for you to have one. However, if you plan on hiring employees in the future or are currently employed by another company as a worker bee and want to start your own cleaning business (and thus become an employer), then getting an EIN before beginning operations is crucial. It’s also important to get one if you want to apply for federal grants or loans as well as obtain licenses and permits from government agencies (such as the state department of labor).
You should apply for an EIN within five days of starting up your cleaning business so that there’s enough time left over before the year’s end when tax season rolls around again! There are two ways you can go about this.
Contacting IRS directly via phone call: You’ll need some basic contact information like name and address along with proof of citizenship status if applicable; once this info has been verified by a representative over a phone call, they’ll process applications within 24 hours or less depending on how busy seasonality dictates demand might be at any given moment in time – so don’t worry about being unprepared! Just make sure everything checks out before speaking with anyone over there (i-e., check bank statements, etc.) so nothing goes wrong during those crucial few seconds when handling sensitive data such as Social Security numbers which could cause serious problems down the line if compromised later down line but thankfully aren’t likely since these aren’t public record unless someone hacks into them somehow which hasn’t happened yet but could happen someday soon though probably not anytime soon because hackers usually don’t target small businesses like ours because we don’t have much money available online compared do larger corporations who keep lots more cash flow coming through their doors every month than us smaller businesses do.”
The first step is choosing the type of corporation you want to form. There are many types of corporations, each with different tax rules and reporting requirements.
We recommend forming an S-corporation for your cleaning business because it gives you flexibility in how the business is structured and how profits are taxed. An S-corporation can pass through its earnings to shareholders without paying income tax at the corporate level—which means there’s only one layer of taxation on earnings when they reach shareholders (as opposed to double taxation, which would occur if earnings were passed through as a partnership or sole proprietorship).
It’s time to get started on your business! You have the choice to form a C corporation or an S corporation, and each has its own advantages and disadvantages. Regardless of what type of corporation you choose, it’s important to understand how each affects your tax liability.
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