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The Entrepreneur's Crash Course and 1St Year Survival Guide

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The Entrepreneur's Crash Course and 1St Year Survival Guide 2nd Edition ACTIVEFILINGS The Entrepreneur’s Crash Course and 1st Year Survival Guide Your Best Introduction to Small Business Law, Finance, Accounting and Small Business Resources! Protect your business and its assets Legal forms, Find money for your business Tax law and common business deductions Accounting, Venture capital, Tax savings Intellectual Property, Purchasing a business Franchises, Avoid bad debt loses and More ! ACTIVE FILINGS LLC The Best Way To Start Your Business! Fast, Easy and Affordable Incorporation Services http://www.activefilings.com - E-Mail: [email protected] e-Business Press Table of Contents 1. INTRODUCTION .......................................................................................................................................................1 2. START-UP BUSINESS CHECKLIST.....................................................................................................................1 3. BUSINESS ENTITIES................................................................................................................................................5 IMPORTANCE OF CHOOSING THE RIGHT ENTITY...........................................................................................................5 FACTORS GOING INTO THE CHOICE OF ENTITY DECISION ............................................................................................5 LIMITED LIABILITY COMPANIES ....................................................................................................................................6 CORPORATIONS...............................................................................................................................................................8 PARTNERSHIPS..............................................................................................................................................................15 LIMITED PARTNERSHIPS...............................................................................................................................................18 TAX ASPECTS OF PARTNERSHIPS, S-CORPS, AND LLCS ............................................................................................20 SOLE PROPRIETORSHIP.................................................................................................................................................22 4. SMALL BUSINESS ACCOUNTING.....................................................................................................................24 FINANCIAL AND BOOKKEEPING RECORDS ..................................................................................................................24 DO IT YOURSELF OR HIRE SOMEONE ELSE? ...............................................................................................................24 DOING IT YOURSELF.....................................................................................................................................................25 INCOME/REVENUE RECORDS .......................................................................................................................................26 ASSET RECORDS ...........................................................................................................................................................27 5. FEDERAL, STATE AND LOCAL TAXATION..................................................................................................28 FEDERAL TAXES ...........................................................................................................................................................28 INCOME TAXES ON EMPLOYEES AND HOW TO PAY THEM:........................................................................................29 TO PAY FEDERAL TAXES ON EMPLOYEES:..................................................................................................................29 STATE TAXES................................................................................................................................................................31 LOCAL TAXES...............................................................................................................................................................31 SMALL BUSINESS DEDUCTIONS ...................................................................................................................................31 6. THE HOME BASED BUSINESS............................................................................................................................34 HOME OFFICE DEDUCTION...........................................................................................................................................34 USING “LOSSES” FROM YOUR MICRO BUSINESS TO OFFSET OTHER INCOME...........................................................36 TAXES ON HOME-BASED BUSINESSES.........................................................................................................................37 7. CONTRACTS FOR THE SMALL BUSINESS....................................................................................................38 OVERVIEW OF CONTRACTS ..........................................................................................................................................38 CONTRACTS FOR THE SALE OF GOODS/UCC ..............................................................................................................39 SERVICE CONTRACTS ...................................................................................................................................................47 8. EMPLOYEES.............................................................................................................................................................49 INTERVIEWING PROSPECTIVE EMPLOYEES...................................................................................................................49 EQUAL EMPLOYMENT OPPORTUNITY LAWS (KNOW THEM!) .....................................................................................50 TERMINATION OF EMPLOYEES......................................................................................................................................52 9. BUSINESS INSURANCE.........................................................................................................................................54 TYPES OF INSURANCE...................................................................................................................................................54 BUYING INSURANCE.....................................................................................................................................................56 10. PURCHASING AN EXISTING BUSINESS.......................................................................................................58 2 © e-Business Press, L.L.C. Entrepreneur's Crash Course e-Business Press LIST OF PROS AND CONS ..............................................................................................................................................58 TAX ASPECTS OF PURCHASING AN EXISTING BUSINESS.............................................................................................61 SOME ITEMS TO INVESTIGATE BEFORE PURCHASING A BUSINESS.............................................................................64 11. BUYING A FRANCHISE OPERATION ............................................................................................................67 TYPES OF FRANCHISE OPERATIONS.............................................................................................................................67 STATE AND FEDERAL REGULATION OF FRANCHISORS ...............................................................................................67 WHAT SHOULD A BUYER LOOK FOR IN A FRANCHISOR...............................................................................................68 12. EXTENDING CREDIT TO ANOTHER BUSINESS........................................................................................71 BEFORE GIVING CREDIT................................................................................................................................................72 COLLECTING ON BAD DEBT ..........................................................................................................................................73 DEBT COLLECTION .......................................................................................................................................................73 13. OBTAINING CAPITAL FOR A SMALL BUSINESS......................................................................................76 BANKS...........................................................................................................................................................................76 FRIENDS AND FAMILY ..................................................................................................................................................76 OTHER BUSINESSES WITH A CONNECTION TO YOUR BUSINESS.................................................................................77 FINDER ..........................................................................................................................................................................77 INVENTION PROMOTION FIRMS....................................................................................................................................77
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