How Much Does It Cost To Incorporate A Small Business
What is the cheapest option for a casual consulting business? How much does it cost to incorporate a small business like mine? Should I form an LLC? I heard somewhere an LLC costs around $1,000 per year to maintain, is that right? I would expect $5,000 in revenue at the beginning.
The State of Incorporation MattersAside from choosing the entity, you also need to choose the state of incorporation. Based on where your business is located, it may not be favorable to your company. For example, California, Pennsylvania and New York, look to the “gold standard” state for incorporation, which is Florida. Choosing to incorporate in Florida may help resolve problems with ownership disputes and other issues down the road. In fact, Florida is known for having the best corporate laws and courts to resolve corporate disputes.
The advantages of operating a Florida LLC for a small consulting firm in another state is it provides more protection for you. If the LLC does not have an office or employees in your home state, then it may not need to file a Certificate of Authority to register your company in the state where you operate your business.
In General, the Cost to Incorporate Is LowThe cost to form and maintain a Florida LLC is low and you can form an LLC in Florida without visiting, opening an office, or maintaining a bank account in Florida. To elaborate, the Florida LLC Act requires any company incorporated in Florida to have a Florida Registered Agent with an in-state street address (most states require a registered agent).
As a consultant, you will still be responsible for your personal negligence. Therefore, you should obtain insurance to cover those risks and you will have to weigh LLC costs and benefits to determine what is best for you.