BizEngine recently had the pleasure of interviewing Nellie Akalp, CEO at CorpNet. She shared some great advice for entrepreneurs and small businesses thinking of incorporation, and we’re re-printing it below.
Dave Choate: Tell me a little bit about CorpNet and how you help small businesses get off the ground. How long has CorpNet been around?
Nellie Akalp: I founded my second incorporation service, CorpNet.com, in 2009 with my husband and business partner. On a daily basis I form business entities for entrepreneurs. From forming an LLC to incorporating to registering a Trademark, I do it all and love every step of it. Most people think that legal business ramifications are costly, but I’m here to help these startups get their business formed in a cost-effective and correct way.
As CEO of Corpnet.com, I am a strong advocate in educating small business owners and entrepreneurs about the importance of protecting their personal assets through forming a business structure. I enjoy discussing legal and business issues concerning everything from business startup through acquisition.
Dave Choate: For the small business just getting into this, how much paperwork is required? How far in advance should businesses start on it or plan to turn to a provider like yours?
Nellie Akalp: It really depends on the type of entity they like to form, C Corp, S Corp, LLC or DBA, etc. The paperwork required to bring any of these entities into existence is 1-3 pages maximum, however, there are steps that need to be taken prior to filing. For the small business owner, the steps are very foreign and the paperwork can be daunting so they need to set aside plenty of time to sit and really focus to avoid any mistakes. If entrepreneurs are in doubt that they are filing out the paperwork wrong, they do tend to turn to a service like mine since we end up saving them a ton of time and we take the hassle of their to do list. For an entrepreneur starting off we are a life saver so they can focus on what they do best, starting and growing their business.
Dave Choate: What are the biggest challenges to incorporating a small business? What are the things every owner-to-be seems to not realize when they’re first starting out?
Nellie Akalp: The incorporation process itself is fairly simple if you know what you’re doing or have the time to invest to complete the paperwork.
I think the real challenge for the small business owner is actually taking the steps and that leap to getting their business legal proof. Many business owners think they are “too small” to incorporate or they just keep pushing it off. Unfortunately there is this lack of awareness that they can incorporate or form an LLC for under a few hundred dollars. One of the reasons why I find people push away incorporating is because they always think it will come along with high legal fees, but that is just not the case.
Dave Choate: Why incorporate? What are the advantages in your eyes? Is there ever a situation when you’d advice against it?
Nellie Akalp: One of the top questions I get from clients is why incorporate. People know they have to do it, but they just don’t know why. There are many reasons and advantages to incorporating a business and here are a few:
- Liability protection: A corporation or LLC separates your personal assets from the assets of the corp/LLC and provides you with liability protection
- Taxes: Federal income tax rates can be lower for corporations than for individuals. And as a corporation, you may be entitled to additional deductions.
- Credibility: Adding ‘LLC’ or ‘Inc.’ after your company name boosts your credibility in the eyes of some customers and partners.
- Business credit/capital: As a corporation or LLC, it can be easier for you to access a line of business credit. And forming a C Corporation will be essential if you plan to seek Venture Capital funding.
- Added layer of privacy: With an LLC or a corporation, the company’s ‘registered agent’ goes on public record, and not your home or business address (in most cases).
The only situation where I would suggest against incorporating your business or forming an LLC is if you are planning to hide your assets or do business for an unethical purpose.
Dave Choate: I wouldn’t imagine most small businesses would be going for that. If you could offer one piece of advice to someone just starting a small business, what would it be?
Nellie Akalp: I would say if you want to have success, you can’t make success your goal. The key is not to worry about being successful, but to instead work toward being significant – and the success will naturally follow. If you do work that you love, and work that fulfills you, the rest will come. And, I truly believe, that the reason I’ve been able to be so financially successful is because my focus has never, ever for one minute been money but to be fulfilled in a career that I want to wake up for.
Nellie Akalp is a passionate entrepreneur, small business advocate and mother of four. As CEO of CorpNet.com, an online legal document filing service, Nellie helps small business owners form an LLC or incorporate a business to start their ventures off the right way. Visit Nellie’s free resource center, follow her on Twitter @CorpNetNellie “Like” CorpNet.com on Facebook and add CorpNet to your Google+ circles!