Setting up payroll for your small business doesn't have to be a daunting task.  You'll find that here are many benefits to establishing a payroll system.  In addition to saving you time, it can keep you from incurring any IRS penalties.  We’ve outlined these seven steps to help you set up your small business payroll system in no time.  

1. Obtain an EIN. You must make sure that you have an Employer Identification Number, or an EIN. This number is used when you report employee information or taxes and other documents to the IRS. If you have not obtained an EIN, you can click here for more information. 
2. Check State & Local ID Requirements. Different state and local government agencies require a business to also get an ID number so they can process local taxes.  Check with your state or local government agency.
3. Fill Out the Proper Forms. Have your new employees fill out W-4 forms (Federal Income Tax Withholding form).  Once your employee completes the form, these forms will allow you to withhold the right amount of taxes from the employee's pay.  You also want to be sure to withhold the right amount of taxes depending on if the employee is an independent contractor or an employee.  Business.gov provides an easy-to-understand distinction between the two.
4. Decide on a Pay Period. Some states predetermine employer pay periods, so be sure to review your local regulations.
5. Maintain Careful Documentation. This includes compensation, paid time off, overtime pay as well as health plan premiums, retirement and any other contributions.
6. Choose a Payroll System. You can choose to run payroll in house or use an outsource service . If you’re considering in-house payroll, you can find software to maintain your payroll. Keep in mind that in-house payroll can be time consuming, and if you do not pay close attention to detail, you may face penalties as a result of small mistakes. Outsourcing your payroll can also save you time. Using an experienced accountant or payroll service provider may save you time and money in the long run. Don’t forget to consult within your network – ask other small business owners how they’ve handled their payroll to gain a better understanding of your options.
7. Preserve Well Kept Records. Make sure you’re aware of proper record keeping techniques.  You must keep W-4s on file for every active employee. After an employee is no longer working for you, you are still required to keep copies of their forms for an additional three years thereafter.  

With a little research and simple organization, you will have your small business payroll set up and running.  Review your options and understand what will work best for you. Don’t forget to network with your peers to gain a better understanding of the best options for people in your industry. Remember to follow all IRS and/or local government instructions carefully; when in doubt, ask a professional accountant for advice. 

For small business owners like you, trying to find your first employee can be a challange. When hiring employees, small business owners must ensure that they are meeting their tax and legal obligations, and you must also make sure that you are hiring the "right" candidates for the job. In order to most successfully hire your first employees, we’ve outlined 8 key steps to finding the perfect fit.

• Obtain an EIN or an Employer Identification Number if one has not already been assigned to the company. 
• Open bank accounts in your company's name if one does not already exist. Employees' pay should be taken from these accounts.
• Obtain copies of all of the documents necessary to report the new hire to the government and to operate the business legally. The Small Business Administration (SBA) has published a description of all of these forms on its website.
• Create a job description. The job description should be accurate and understandable, and it should include an overview of both the company and the position (i.e., tasks involved, qualifications, salary range, etc.). More tips for writing effective job descriptions can be found online via Inc.com and the Small Business Administration’s website.
• Publish the job description. You have many outlets to find your perfect fit. Try publishing the description on your company's website, on job-search websites, social media sites, and even in the newspaper. Here's a great article outlining 10 places for you to start your search. The open position can also be promoted by recruiting firms, or presented at career fairs. Make sure it is visible to the best potential candidates for the job itself.
• Create a list of questions to ask prospective job candidates. For ideas, check out Monster.com's list of 100 potential interview questions.
• Conduct the interviews. Make sure to include company and job-specific questions, and always be cognizant of the "7 C's."
• After conducting interviews, select the best candidate for the job and extend an offer.
• Start working!

By following the steps described above, you can be sure that you’re meeting all of your obligations and that you’re hiring the best possible candidates for your jobs - the first time and every time!

When forming a corporation, you’ll come across the term “officers.” This is a term unique to corporations and does not apply to Limited Liability Companies. Your Board of Directors is the governing body of a corporation who is elected by shareholders. The directors are then responsible for selecting the officers of the corporation and for the supervision and general control of the company.

An officer can be defined as individuals appointed by the board of directors who are responsible for carrying out the board's policies and for making day-to-day decisions. The necessary positions and duties of officers are typically set forth and stated during the creation of your corporation’s bylaws.

Here, we briefly describe 4 commonly valuable officer roles and their duties in the corporation.

• President. The president is responsible for managing daily operations of your corporation. If you do not have a chairperson, your president will preside over all meetings of the board of directors. You may want to consider appointing a Vice President to fulfill the president’s duties, should the president be unavailable. However, it is important to note that if the president is to leave a company, the vice president does not automatically assume the position of president.
• Secretary. Your secretary will be responsible for maintaining your corporate records and is commonly responsible for recording minutes during your meetings. If your bylaws state that you must notify shareholders and directors of meetings, your secretary would be responsible for sending out the notification.
• Treasurer. Treasurers will maintain corporate account books, including your profits, losses, assets, and other pertinent tax information. Your treasurer may or may not be involved with daily financial record keeping, depending upon how you set forth their duties in your corporate bylaws. If they do not partake in daily bookkeeping, you may decide to have the treasurer oversee the daily activity of your internal accountant.
• Assistant Positions. If you have a large corporation, you may find it beneficial to create assistant secretaries and treasurers. These assistant positions can help you to proficiently manage workloads while saving time if you have multiple offices. Creating assistant positions also offers the opportunity to boost employee morale without significantly changing their specific career duties.

While these are the most common roles and duties of officers of a corporation, you may find that you do not need to fulfill all of the above mentioned positions. Keep in mind that we do recommend having a president and secretary at minimum.

If you’d like to learn more about the common characteristics of corporations, take a look at our previous blog post. As always, if you have any questions that aren’t answered on our blog or in our Learning Center, one of our incorporation specialists would be happy to assist you by calling 800.421.2661. 

There are only 4 days left in 2012 and this means that it’s time to start thinking about the sometimes dreaded New Year’s Resolution.  Chances are you’ve been reviewing your past year - deciding what worked, what didn’t, and what to do in 2013. Since this can be a hectic time for many businesses, we’ve created a checklist of 4 Key New Year’s Resolutions For Small Business Owners.

Protect Your Assets.

• Form  a Corporation or a Limited Liability Company. If you have not done this already, you should form a Corporation or a Limited Liability Company in order to gain protection. In doing this, you’ll separate your personal assets from the assets of your company, leaving you less vulnerable to personal damage in the event of a lawsuit.

• Review Annual State Requirements. Most states require Corporations and LLCs to file an Annual Report or pay an annual fee. These requirements do vary by state, so it’s best that you review your state’s specifications. You can find the requirements on most Secretary of State Division of Corporation websites and can also review our State Specific Information section. Take note of due dates and schedule reminders for filing and payment deadlines.

• Maintain an active Registered Agent. You’ll also find that your state of incorporation or formation requires you to maintain an active Registered Agent. To review the duties of a Registered Agent, you can take a look at our previous blog article.

• Obtain or update all required business licenses. Business licenses are handled at state and county levels. If you need help obtaining a business license, you can visit our Business License section. If you have already obtained a business license, check the expiration date and arrange for any necessary renewals.

Update Your Website.

• Do a Review. Check pricing, contact information, and general content for accuracy. If you have changed your phone number or email address, it’s crucial to provide this updated information. Your website is the main way your clients will contact you and you wouldn’t want your clients being lead to a dead end. If you provide time sensitive information, make sure you have someone consistently updating the content.

• Update design for a better user experience. Outdated web design can be a turn off for many potential clients. Make sure that your site is easily navigable and provides a friendly, easy experience for both current and potential clients.

• Include links to your social media pages. Make sure that you’re linking to your Facebook, Twitter, LinkedIn, and other social media accounts. These are great ways to expand your online presence and attract new clients. You’ll find the guidelines for adding buttons on the social media form’s website. For example, take a look at Twitter.

• Provide relevant educational information. This can be displayed on your blog or frequently asked question section. Any educational information is a great takeaway for your clients and it is something that they’re inclined to pass on to other people. This is a great way to start having the web link back to your site.

• Check for mobile viewing optimization. You’ll find that many people are probably viewing your website from their cell phone, or other mobile viewing device. Make sure your site is still easily navigated, even in the mobile view.

Introduce Something New.

• Create Social Media accounts. Create a Facebook page, Twitter Account, and LinkedIn page for your business to get started. These are great outlets to find new customers, announce promotions, and stay in touch with your audience. You’ll find many other social media outlets out there, including Pinterest, which is great for retail based businesses.

• Start a Blog. Starting a blog can help your organic search engine optimization. This will help drive traffic to your website, and it is also a great way to provide your clients with resourceful, educational information.

• Offer Coupons or Deals. This can be done through new platforms such as QR Codes linking to social media, or can be done in more traditional format, such as postal mail. Either way, a coupon or deal is a great way to ramp up visits to your website and increase revenue.

Expand Your Network.

• Join LinkedIn. LinkedIn is a social network for business professionals. This is a great way for you to connect with industry professionals and spread the word about your business and services. LinkedIn recently introduced company pages, where you can list your products or services and share your company background. You can also help answer questions in group discussion boards and find local networking events in your area.

• Attend networking events. Your social network should extend beyond your social media websites. Take time to find local events where you can share your knowledge and make connections. 

We hope that these resolutions can alleviate some stress from your new year! If you have any questions or needs to check that you've completed your annual requirements, please contact our office. 

You can download the Checklist for free below to help keep you on track in 2013!

Believe it or not, 2012 is rapidly coming to an end. During this time, you should start reviewing your annual business requirements. If you’re a corporation, have you held your annual meeting? Annual meetings are required for corporations and this where your corporate minute requirements will be met.

Typically, only one meeting per year will be required, but the amount required can vary by state. You may also have addressed the need for more than one annual meeting when you created your bylaws. You should review your state statutes and bylaws to determine how many meetings you’ll need to have. These meetings can be broken down into two types, Regular and Special.

While annual meetings may sound very formal, small businesses have the flexibility to conduct it more like a discussion.

Here are 4 Tips For Have an Easy Annual Meeting:

• Create an Agenda. This can consist of your discussion topics and what you’d like to resolve. It may include reviewing past meeting minutes, annual upkeep, new business issues, previous business solutions, or future meetings.
• Decide on a “moderator.” This person may also be known as the presiding officer. They will follow the agenda, prevent repetitive discussions, and keep the meeting moving.  The moderator can also formally conclude discussion or preside over votes.
• Have your quorum present. A quorum is the percentage or proportion of voting shares required to be represented in person or by proxy to constitute a valid shareholders meeting, or the number of directors required to be present for a valid meeting of the board.
• Take advantage of technology. Many states allow annual meetings to be held via conference call. There are multiple services that offer this function available to you at little to not cost. Conference calls are an easy, effective way to meet your quorum. 

During your meeting, make sure that you’re keeping notes of everything discussed. These notes will fulfill your annual corporate minutes requirements. These, too, can be structured less formally than your initial articles of incorporation in bylaws. A few key things to include your minutes are…

• Date, time, and location of meeting.
• People present at the meeting.
• Nature of the meeting.
• Chairperson(s).
• Any actions taken or decisions made. 

This is the first of our series of year end business reminders. Be sure to check your state requirements and bylaws, and hold your annual meeting if you haven’t already. Don’t forget to keep your minutes!

If you’re newly incorporated and have not created your bylaws, we offer a corporate kit that will make creating your bylaws very simple. 

When deciding on an entity type for your business, you should review how taxes will be handled. Not all entity types are taxed the same way. In this post, we’ll highlight how Limited Liability Companies are taxed differently than corporations.

One feature that Limited Liability Companies do not share with Corporations is their tax options. Limited Liability Companies have the option to do partnership taxation. This process is only available to partnerships, S Corporations, and Limited Liability Companies, and may also be known as “pass through taxation.”

LLC Pass Through Taxation can be broken down into the following 3 characteristics…

• Pass through taxation creates a situation where the business entity will not be taxed.
• Income passes through the business entity to its members.
• How the LLC will report their annual income will depend on its number of members.

This pass through taxation option is one of the notable characteristics of Limited Liability Companies. As always, it is best to do your research. When reviewing an entity type and its tax options, we usually recommend consulting an accountant in order to better understand your options and how you can achieve the maximum benefit for your business. 

If you'd like more information about Limited Liability Companies and how they can differ from Corporations, you can visit our Entity Comparison Chart. Our free Pass Through Taxation Info Sheet (available below) highlights information about pass through taxation, along with defining the most common characteristics of Limited Liability Companies.

Incorporating is an important step to providing you and your business with more security. Corporations historically started as a means for people to gather their finances for large business endeavors, while benefitting from protection from liability. Without such protection measures, people were less likely to invest in projects, leading to the continuation of corporations.  

This limited liability feature is one of the most prominent features of corporations and limited liability companies. You can protect your personal assets by incorporating or forming a company. When you do so, you are creating a legal entity that is separate from yourself. This means that your personal assets and your business assets will be separate. In the event of a lawsuit or if your business should fail, your personal assets cannot be touched.

As an owner, you are separate from the legal business entity, but you still must be sure to follow all state rules and regulations regarding your corporation or limited liability company.

A few steps to insure that you protect your assets include…

• Creating proper articles of incorporation and bylaws, along with any other set state requirements.
• Acting in accordance to the company’s articles and bylaws.
• Vigilant recordkeeping habits, including attention to detail.
• Maintenance of annual taxes. 

Aside from these basic steps, there are further ways to maximize your liability protection. Here, we’ve noted 3 Key Do’s and Don’ts that will help you protect your assets. 

Once you incorporate your business, you are on the road to protecting your personal assets. You should keep in mind that there are still legal obligations for you to follow in order to achieve maximum liability protection. If you’d like to learn more about incorporation and its benefits, check out our Learning Center. You can also learn more about state specific requirements by visiting our detailed State Database.   

Our “How Incorporating Protects Your Personal Assets” info sheet summarizes asset protection strategy and other benefits of incorporating. It’s available for free download by clicking the button below!

As we’ve mentioned in past posts, you have a number of options when it comes to finding resources to jumpstart or expand your business. Today, we’re going to highlight one common way of raising capital for your business – issuing stock.  If you incorporate your business as a Corporation, you are able to issue to stock. Limited Liability Companies, also known as LLCs, do not issue stock. For a detailed comparison of business entity types, review our comparison chart.

Stock is typically issued by share. When you incorporate, you designate an initial number of shares that can be issued at a certain par value. You can then issue these shares to investors in order to raise capital to start or expand your business.

In order to help you understand some of the basic information regarding raising capital with stocks, we’ve answered 5 of our most frequently asked questions below.

1. What is stock? Stock represents ownership in a corporation. It can be represented by a certificate and can be common or preferred, voting or non-voting, redeemable, or convertible. The classifications and special designations, if any, of the stock are set forth in the articles of incorporation.
2. Who is a stockholder? Stockholders may also be referred to as shareholders. Stockholders are the owners of a corporation based on their holdings of share. They own an interest in the corporation rather than specific corporate property.
3. What is par value? Par value is the minimum price of a share below which the share cannot be issued. The par value is designated in the Articles of Incorporation of your business. 
4. What is the required minimum number of shares? The minimum number of shares required to be issued by a corporation varies by state.  After reviewing state regulations, you can decide the minimum number of shares you’ll be issuing for your corporation.
5. What is a stock purchase agreement? A stock purchase agreement is an agreement between the shareholders and the corporation. It provides a mechanism to regulate the transfer and sale of corporate stock. Often, a stock purchase agreement will provide a right of first refusal in favor of the corporation or remaining shareholders in the event of a proposed sale of stock by a shareholder. A stock purchase agreement can also provide for a purchase upon the death, disability, retirement, discharge, resignation, or bankruptcy of a shareholder.

If you are interested in learning more terms involved with issuing stocks, you can visit our Terms & Definitions page. Here, you’ll find an alphabetical list of terms that will help you maintain your business. 

Our Free Raising Capital With Stock eBook also answers stock questions in detail and includes a list of commonly used terms. 

During the course of your business, you may want to make changes to your corporation or limited liability company that will be legally recognized. One common question our Incorporation Specialists encounter is, “How do you change your corporate name?” In order to formally do so, you would need to file and “amendment” with your company’s state of incorporation or formation.

An amendment to your corporation or limited liability company is a formal filing with your state of registration that officially changes the details of your business structure. The 3 most common types of amendments that are filed are :

1. Name Change Amendments. You can elect to “amend” or change the name of your corporation or limited liability company for any reason. Once you’ve filed the amendment with the appropriate state, your new company name will be legally recognized.
2. Stock Change Amendments. You may have incorporated your company with the intentions of issuing stock to raise additional capital and expanding your corporation. If you have issued all of your stock and need to increase the number of authorized shares, you can legally do so by filing a Stock Change Amendment.
3. Change in Directors or Members. It is not rare for the members or directors of businesses to change throughout time. When one of your members or directors listed on the Articles of Incorporation leave the organization or a new member or director needs to be added, you can formally note these changes by filing an amendment.

As with all corporate filings, regulations regarding amendment filings will vary from state to state. After you’ve filed your amendment, you’ll receive your Certificate of Amendment that legally recognizes the changes you’ve made. Keep in mind that filing an amendment does not change your Federal Tax ID (EIN) because your company is still technically the same legal entity. However, the Internal Revenue Service (IRS) does require that you notify them of any amendments you’ve made.

If you have any questions about amending your corporation or limited liability company, let us know! You can also find state regulations in our State Information Center.

We’d also like to announce that we’ve recently launched our Small Business Resource Center! Inside, you’ll find trusted partners and resources that will help you maintain and expand your business. We want to continue to help you, so please let us know of any services you’d like to be added. 

From August 27 to August 30, HubSpot hosted their annual Inbound Users Conference in Boston. For those of you unfamiliar with HubSpot, it’s an online marketing management platform that allows you to monitor paid search campaigns, schedule social media, review competitor activity, oversee sight traffic, create landing pages, and much more. We’ve been satisfied users of HubSpot since 2010 and we were extremely excited to make it to the conference this year.

Inbound 2012 consisted of 60 breakout sessions lead by the HubSpot staff, 5 keynote speakers, and a great performance by Cyndi Lauper. We found attending to be extremely beneficial and we’d like to share a few highlights from Rand Fishkin’s keynote presentation, “Choose Short Men & Tall Women.” 

Rand, CEO of SEOmoz, highlighted the concept that most marketers and small business owners have preconceived “required” notions when it comes to SEO. Below are 3 notable biases and his suggestions on how to look at things differently when marketing a small business online.

• You should only share information on 1 topic – the topic related to your industry. You should actually be focusing on your audience’s interests. While it's important to provide information relevant to your business, you also need to keep your audience interested. Avoiding narrow subjects will work best when looking for a greater response and interest in your content. Maintaining a broad focus and discussing multiple topics will earn signals that help your entire site.
• You should only choose high volume keywords. While high volume keywords can be favored in paid search campaigns, long tail and chunky middle keywords also perform amazingly when trying to increase your SEO. Rand noted that, according to Google, in 2011, 18% of all searches performed were new searches. This means that they were strings of searches that had never been used before. Try researching what people search for organically and testing those keywords.
• You should chase your competitor’s links.  If you’re only researching your competitor’s tactics and links, you may end up doing exactly what they’re doing. This could leave you ranking right under them in search, if not lower. It’s important for you to create your own unique content. Going after a broader theme will help you in the end.

Rand’s entire presentation of 12 biases was not only interesting, but insightful. When it comes to SEO, he is a great resource to follow.

We hope that you find these suggestions as helpful as we do.  HubSpot also manages their own blog that consistently has suggestions regarding SEO optimization and best marketing practices to help your company.

If you have any questions about our experience with HubSpot, let us know! We'd be happy to answer them.