Ways You Can Incorporate Your Business as a Landlord - dummies

Ways You Can Incorporate Your Business as a Landlord

By Robert S. Griswold, Laurence Harmon

How you choose to structure your business as the landlord depends in part upon your willingness to share its future and yours with others. Forming a corporation is a fairly complex legal endeavor that involves the following steps:

  1. Choose and register a name for your corporation that complies with state requirements.

  2. Write and file your articles of incorporation.

  3. Write bylaws to govern corporate operations.

  4. Issue stock certificates to your corporation@’s owners and investors.

  5. Obtain any business licenses and permits required by your state and local governing bodies.

You can take any of the following three approaches to form your corporation:

  • Do it yourself. If you’re the sole owner of the business and don’t intend to add owners, seek outside capital, or do business in multiple locations, you may be able to incorporate without expert assistance.

  • Use a third-party service.

  • Hire a reputable, local attorney.

Outsourcing to a business-formation service

Numerous firms offer services to help you form a business entity. Three of the best known are Legal Zoom, Rocket Attorney, and The Company Corporation. Others include Mynewcompany.com, Directincorporation.com.

Before using a service, check with others who’ve used it, and expand your search to include LinkedIn, Facebook, and Twitter. Find out how they’re regarded by the Better Business Bureau and local consumer protection organizations to determine whether any complaints have been filed against them.

Keep in mind that these firms are ordinary retailers who tend to advertise low prices “Starting at …” for only a few of the services you need. Comparison shop. Find out what’s included and what’s not. Get a price quote from a reputable local attorney, as well, for comparison purposes. Make sure you get a price quote that covers everything you need to form your corporation.

Hiring an attorney and accountant

We recommend that you hire a reputable, local attorney to guide you through the process of incorporating your business and an accountant to manage the corporation’s payroll, taxes, and financial reporting for several reasons, including the following:

  • Your attorney can help evaluate your specific needs for the area where you’re setting up shop and recommend the best business structure to meet those needs.

  • Choosing the wrong business structure may imperil your personal assets and limit your tax benefits.

  • Your attorney makes sure all documents are filed properly with the right government agencies and in a timely manner.

  • Your attorney can refer you to experts in accounting, banking, financial planning, insurance, and web design.

  • A good business attorney will have an ongoing professional interest in your success.

  • Your accountant keeps the books and creates and files financial reports in compliance with federal, state, and local laws.

Running your operation as a corporation

As complicated as forming a corporation is, running it requires even more attention to detail. You must fulfill the obligations of corporate governance, which include:

  • Paying yourself and other owners and investors salaries or distributions

  • Holding at least one director and shareholder meeting annually

  • Typing up and filing minutes from those meetings

  • Updating the bylaws

  • Practicing generally accepted accounting principles (GAAP) — standards and procedures for recording financial transactions and producing financial reports

  • Producing and filing an annual report with your Secretary of State

  • Preparing the corporation’s annual tax return