Contributed by: Nellie Akalp, CEO and Founder of CorpNet.com.

Yes, I know. The majority (if not all) of you did not start a business because you love tax law and legal fine print. And in the flurry of supporting your current customers, working to add to your client base, taking care of your home and family, and finding some down time for yourself (remember down time?), it’s all too easy to put off the question of incorporating your business.

But as a business owner, the day will come when you inevitably will have to address the legal aspects of your business – and the sooner the better. And, fortunately, the process can be relatively painless and hassle-free. 

But let’s back up a bit. Let’s take a look at why you should incorporate in the first place. I talk to countless small business owners and freelancers who consider themselves too small to worry about incorporation. After all, you don’t have mazes of cubicles…you may not even have any employees. However, incorporation can still be a smart idea even for the self-employed graphic designer or wedding planner. And here’s why:

• It protects your personal assets: Once your business is incorporated, it exists as a separate legal entity. This means that the corporation (and not you, the owner) is responsible for all of its debts and liabilities. Of course, most entrepreneurs don’t start their business expecting to anger clients or default on payments. And most likely, you won’t encounter such problems…however what if a copywriter unintentionally plagiarizes while working on a client’s website? What if your major client fails to pay, making it impossible for you to meet your own obligations? Without incorporation, you, as the owner, can be personally liable in these situations, and this puts your own personal savings, retirement, child’s college fund all at risk.
• It can offer tax benefits: For some individuals and businesses, incorporating can help lower the tax burden. For example, through incorporation, a self-employed contractor could reduce her federal and/or state income taxes by avoiding self-employment taxes. And corporations may be entitled to additional deductions not available to individuals. Of course, specific circumstances vary, and you should consult with a CPA on your particular tax situation.
• It can change your outlook: You’d be amazed at how much adding three little letters (Inc or LLC) after your company name can change the way you approach and perceive your business. And when you’re working from home, you need all the reminders you can get that you’re actually running a business. Plus, marketing studies have shown that adding Incorporated or LLC provides a sense of credibility and trust with current customers and potential customers.

After “Do I need to Incorporate?”, the next question I’m usually asked is “What business structure is right for me?”  It’s a great question…one that I can’t necessarily answer here. But here’s a quick synopsis to get you on the right path: 

• Limited Liability Company (LLC): The LLC is very hot among small businesses right now, and for good reason. It’s a hybrid of a partnership and corporation. It offers liability protection, but with minimal corporate formalities (in a Corporation, you have to pass resolutions and file minutes whenever you want to make a change to the company…this isn’t the case for an LLC).  If you’re the sole owner of your business, the LLC is a great way to protect yourself without adding a lot of corporate bureaucracy. An LLC is considered a pass-through entity when it comes to federal income tax. This means the business itself is not taxed; rather, any business income or loss is reported on your own individual tax return.
• Corporation: The Corporation is the most common form of a for-profit corporate entity. There are actually two types: the S-Corporation and C-Corporation. Like the LLC, the S Corporation is also a pass-through entity for your income taxes. However, the C Corporation is not pass-through and for many small businesses, this can result in ‘double taxation’ where your Company is taxed, and then you’ll also be taxed on any profits/salary you draw from the business.

Unless your business is particularly complex, you should be able to incorporate your business or form an LLC online, without having to retain a business attorney. By working with a legal document filing service, you can represent yourself to create a legal business entity. And in the eyes of the law and IRS, your business structure will be just as valid than if a high-priced attorney sent in the documents for you. 

Of course, when spare seconds seem in short supply, legal fine print and paperwork aren’t exactly high on your priority list. But getting your legal ducks in a row can give you peace of mind and help you avoid any legal pitfalls in years to come.

Nellie Akalp, is the CEO and Founder of CorpNet.com, an incorporation filing service specializing in helping mom entrepreneurs in getting their businesses off the ground quickly and affordably. Whether you need help  incorporating, forming an LLC or filing a DBA, Nellie can help. To learn more visit: CorpNet.com.

If you have children and you’re thinking of launching your own business, you need to start thinking about—and planning for—childcare options. In my opinion, childcare can be one of the biggest obstacles a mompreneur faces! 

I understand that many moms choose to launch their own businesses so that they can physically spend more time with their kids. A lot of the moms I interviewed for my book, The Smart Mompreneur, felt this way and several commented that putting their kids in a traditional daycare setting of any sort would completely undermine this goal. I respect this viewpoint, but I also strongly feel that whether you’re looking to run a part-time or a full-time business, you can’t be successful if you constantly have kids screaming in the background, wreaking havoc and running into your office every five minutes!

The reality is that small children are not going to keep quiet during business calls or take naps when you want to get work done. So if small children are a factor in your life, you should start thinking about childcare options as early as possible. You should also be sure to factor any potential childcare costs into your projected monthly income and expense projections.  But, the good news is that when you work for yourself and have lots of flexibility, you can often get very creative and arrange childcare for a minimal cost or no cost at all!

When my first daughter was a newborn, I shared a nanny with another freelancer. This option afforded me an extreme level of care at a fraction of the traditional cost. Now that she is older, I’ve enrolled her in daycare three days a week. I found a great retiree that watches my younger daughter at her home while my older daughter is in school. She charges me less than a traditional nanny would since I bring my daughter to her home AND I now have my home office to myself three days a week!

This type of arrangement may or may not work for you, but I will say that these arrangements have consistently provided me with three days per week of quiet, uninterrupted time to focus on my business. On the days that my kids are home with me, I often check e-mail, schedule calls and complete urgent tasks during their naps, but for the most part, I try to limit my work to the days when I have reliable childcare.

Again, what works for me may or may not work for you, so I’m also providing you with a few other creative childcare options to consider:

Create a childcare co-op. A childcare co-op is basically a group of work-at-home parents that swap child-care duties. If you chose this option, keep track of the hours that you watch each child and make sure that everybody gets their fair amount of time. The benefit of this option is that you get free childcare. The downside is that you can’t work while you are watching other people’s children.

Organize a mom-swap. Instead of many people working together within a co-op, a mom-swap is basically you and a friend trading off childcare days. If you chose this option, make sure you set clear boundaries, so neither of you takes advantage of the other. It would also help if your kids get along well. If they don’t, this could be a nightmare.

Share a sitter with a friend. Have a sitter watch both of your children at the same time and split the costs. Here again, make sure that you communicate with your friend to avoid complications.

Barter services in exchange for child care. Pay the person caring for child with your services, rather then your money!

Locate an affordable mother’s morning out program. Many churches offer these programs, and you can enroll in more than one!

Regardless of the option(s) you choose, the bottom line is its important to be sure your children are cared for during the time you plan to work. Spread the word that you are looking for childcare and survey all your options. It may take some time and energy, but your investment will pay off when you find the best and most affordable childcare.

Do you have a creative childcare strategy to share?  Post your comments here!  I’ll also collate the information into a future post and send the mom with the most creative solution a $20 Starbucks card!