Category Archives: FAQ

Business Basics: Business Licenses

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This week in business basics, we chose to look at a topic that has regularly confused some of our customers – business licenses. Business licensing can be a bit of a tricky topic because, quite honestly, there is no one answer for most of the questions asked about licensing. But we can try and help give a broad overview so that our readers understand what a business license actually is, and what it allows you to do.

Getting a business license is not like getting, say, a driver’s license, where all anyone has to do is pass a couple of tests and get a piece of plastic that qualifies them to drive any personal car. Business licenses are essentially permits to operate a business in your state, city, and industry – whether you actually need one depends on the legal regulations those three groups are bound by, and enforce.

If you, for example, run a computer repair business out of your garage in LA county, your business needs to apply to the Bureau of Electronics and Appliance Repair for an electronics repair license. This would, of course, be on top of the standard business license that most states and cities typically require.

But as we said, every business, industry, state, and even city has a different set of regulations in place. We recommend that, before you begin to try and dig through your state’s website for the necessary forms, you check out the US Small Business Administration website and use their tool to determine what licenses and permits you will need to apply for.

However, we can help point you in the right direction in terms of legal compliance. Nearly every locality requires businesses to have an Employer Identification Number, a Doing Business As name (if business is done using any other name but the owner’s), OSHA certification, and a Sales & Use Permit. All of these allow the state and city governments to keep track of your business, enforce relevant laws, and collect taxes.

It is VITALLY important that you comply with your local laws and regulations – operating without the necessary licenses or permits is a quick way to get fined and/or have your business shut down. Even if you think you couldn’t possibly be in an industry that requires any sort of license or permit, check with your state and local government and use every available tool that you can to ensure compliance with the law.

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V is for Venture Capital

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Venture capital is a bit misunderstood due to the press venture investments often receive. It seems like every week or so the news is covering some start-up that raised an inordinate amount of venture capital for an idea that sounds, at best, a bit shaky. 

But that tenuous relationship between a business idea and its application is what turns an investment into an injection of venture capital. Venture capital is, in a nutshell, the money that is invested into an early-stage, high-risk company that is believed to have the potential to yield huge returns, if it succeeds.

Normally, the businesses that secure venture capital have to be novel – so IT, biotech, software, and other technology based companies are the ones we hear about. Occasionally the focus on a particular type leads to what we call ‘bubbles’ – the dot-com boom and bust of the early 2000′s, for example, was partly due to an high level of venture capital being invested in fledgling internet-based companies that, usually, weren’t worth as much money as people thought. When these companies inevitably failed, a lot of VC firms, funds, and investors lost money. These various investment groups are now, perhaps thankfully, a bit more cautious with the types of business they invest in.

Obviously, securing an investment from a venture capital fund or firm is not like getting a traditional loan – you do not have to pay that investment back. Instead, a business that has received venture funding gives the investors a stake in the company, typically in the form of shares. If the company does well, these shares will increase in price. A venture capitalist or firm then, usually, sells their shares when a larger company comes around offering to buy the start-up. By then the shares have increased in worth, and everyone gets their money back, plus a substantial return on their investment.

So, with all of this in mind, how does a business go about raising venture capital? Well, you first need a really, really good idea – because of their past mistakes VC firms and investors are very wary with their money. They already have to contend with businesses that have a higher rate of failure than most, and they are picky about who they choose to invest with. You also have to be ready and willing to give them something in return for their early investment. They will, after all, be rather large shareholders in your business, which means they probably expect a say in how things are run. When getting your pitch ready for a VC firm, spend some time crafting the answer to the inevitable ‘What’s in it for us?’ question that will be asked.

Despite the frequency at which it appears in the headlines and on TV, venture capital is fairly hard to raise, and only a few specialized businesses will actually be able to find someone willing to roll the dice and invest in the company. It is also just one of many, many different ways to raise money. Before you start knocking on doors, then, remember to weigh all of your options, look into alternative sources of funding, and make sure you truly want become involved with venture capital investments.

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Business Basics: ‘Doing Business As’ Names

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A ‘Doing Business As’ name is one of the most important parts of a business, but far too often we hear about businesses choosing to put off filing for a DBA until they are a bit more established. Unfortunately this leaves those companies open to all sorts of problems later on as a DBA name is needed for some of the most basic aspects of running a business! But what exactly is a ‘Doing Business As’ name? And why do businesses need to file for one?

What is a DBA Name?

A doing business as name, or as it is sometimes known as a fictitious business name, is the name under which you do business. As a way to reduce fraud, most states require anyone who offers goods or services under a name other than their own to file for a DBA. Doing business as names are typically handled by the Secretary of State or department of corporations of whatever state the company does business in. The entity or person that handles DBA names will sometimes even offer DBA name searches free of charge, ensuring that you aren’t wasting your time by filling out paperwork for a name that has already been claimed.

Why would a business need one?

You are entitled to use your own name for your business if you want to, but any changes or additions to the name would require you to file for a DBA name. For instance, if our CEO Deborah Sweeney opened up a business that paints houses, she could call her business ‘Deborah Sweeney.’ However, if she wanted to call it ‘Deborah Sweeney Painting,’ she would have to file for a DBA name as ‘Painting’ is not a part of her legal name. This might seem a bit silly but as mentioned before, this is largely a way to prevent fraud. As DBA laws are so important to a state’s anti-fraud efforts, you need a DBA name for some of the most rudimentary parts of running your business. Want to open a business bank account? Receive checks written out to your business? Advertise your services using your business’s name? Most states require companies to file for a DBA name before doing any of the above. And, if you don’t complete the paperwork, you could be hit with some serious fines.

How do I file for a DBA name?

Most states have a standardized form available on their website for filing a DBA name. Just head on over to the website for the state you do business in, find the Secretary of State’s page, (in some cases, this may be the page for the department of corporations) download a DBA form, fill it out, and send it in along with the required processing fee. Filing also usually involves either you or the state performing a DBA search before the paperwork is processed. And if you need a little extra help from professionals, we are always happy to help you file for a doing business as name as well!

A doing business as name is extremely important, and it is best to file for one now before you build a lot of trust into the name of your company, only to find that you were actually using a business name that was already claimed. Running a business under an assumed name without filing for a DBA or fictitious name can also land you in hot water with the state and require you to pay a series of fines and penalties. This is definitely something you want to take care of early, so once you figure out what your business name is going to be, start the paperwork and file for a DBA name as soon as possible!

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Business Basics: Professional Corporations

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Welcome to our weekly business basics post! This week we decided to explore a specialized legal entity called a professional corporation (PC). Now most of those who know a little bit about corporate law probably know that there are two, main types of corporations – S-Corps, and C-Corps. But in addition to these, there are a few other specialized structures that are important to keep under the belt of a small business, like the professional corporation.

So what is a professional corporation?

Like with a regular corporation, converting a sole proprietorship or a partnership into a professional corporation turns the business into its own, separate legal entity. However, unlike a regular corporation, the owner of a business being turned into a professional corporation must be licensed to offer a specialized professional service. In other words, the owner of the would-be PC has to be a doctor, or lawyer, or accountant, or architect; some sort of licensed profession.

Why would someone choose to form a professional corp?

Like a standard corporation, a professional corporation provides a certain amount of protection for the business owner, or owners, as a PC can carry its own debt and liabilities. It is important to note that a PC does not protect an owner from being sued as a result of their own negligence – a doctor that turns his or her practice into a PC, for example, can still be sued for malpractice. But if two doctors act as partners within a practice, forming a professional corporation can help protect one doctor from being liable for any judgement received from a lawsuit against the other doctor. So without that protection, one of the partners could be held accountable for the mistakes of the other one. Professional corporations, then, are very useful for any licensed professional running a practice with another licensed professional.

What do I have to do to form a professional corp?

First, you must be licensed to provide whatever service your practice offers in the state you do business in. Most states will want to see proof of relevant licensure at the time of incorporation, and the state licensing board will likely have to approve your articles of incorporation before you can move forward. Usually the licensing board will ask that the articles of incorporation bear special language and, depending on the state, PCs occasionally have to contend with certain laws after they are formed – for example many states ask that a professional corporation designate itself as such by including ‘PC’ or ‘Professional Corporation’ in the name of the practice.

Professional corporations take a bit more effort to form, but are extremely useful for practices run by two or more licensed professionals. After all, the last thing you want is to have to pay lawsuit that resulted from the negligence of your partner. And, like other corporations, a PC offers some protection from debtors looking to collect on a business’s liabilities. It is important, however, to check with your secretary of state and your state’s licensing board to clarify what, exactly, you must do to form a professional corporation and what special provisions you will have to contend with as a licensed PC.

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5 Google+ Marketing Tips for Your Small Business

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Your small business only needs to maintain a presence on Facebook and Twitter, right? Wrong. Even though Google+ can seem like an afterthought in social media, ignore it and you’ll miss out on an enormous audience. There are five things you can do on Google+ to promote yourself in a new and exciting way and boost your brand’s awareness:

1.       Use the “About Page” to link your website

Take advantage of this opportunity to tell the audience about your company. This is the perfect place to add important keyword links for your site. Another cool feature is that Google+ allows you add bullet points, so you could simply list your products and services and have them link to pages on your website, which go into more detail.

2.       Plan events

Gmail accounts are ubiquitous, and Google+ has really neat optimized features for users. Their event feature, for example, is a great tool to use if your company would like to plan webinars, parties or other events. Regardless of whether or not they are Google+ users, their invitation will sync up with Google Calendar and help you track attendance. It’s also a great way to keep track of planning and logistics related to the event before, during and after!

3.       Create frequent optimized posts

By including keywords in your Google+ posts, you will ensure that you show up whenever your followers search for that keyword. This feature is called social search and it is especially effective for those with a large following. By frequently posting relevant content, you are increasing your chances of coming up in Google search results, which is one of the biggest benefits to maintaining a Google+ page.

4.       Be a Google Author

Google is constantly looking for new ways to authenticate content. By setting up Google Authorship, you are establishing yourself as a credible source for content. This means that you will be trusted by Google and will be able to reap all of the SEO benefits that come with that. By simply adding a photo of yourself and a miniature bio, you can drive tons of traffic to your page and significantly boost awareness.

5.       Talk to the right people

Google+ is all about talking to the right people, and it makes it pretty easy to do so. One way to do this is to join communities that are relevant to your company’s industry and interests and becoming a valuable part of the conversations. Once you have done this, you can begin to form relationships with people, and when they add you to their circles, you can add them to your company’s. Once they are in your circle, the things you post will show up for them.

Danielle Pacelli is the Marketing Coordinator at MycroBurst/Logo Design Guru. MycroBurst is based in Langhorne, Pa. and is an online marketplace for graphic design. MycroBurst provides custom designs through crowdsourcing. Follow Danielle and MycroBurst on Twitter @MycroBurst.

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Business Basics: Benefit Corporations

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One of the main reasons we chose to start this blog was to help explain the facets and aspects of business that typically get overlooked. To help us do this, we decided that, every Tuesday, we are going to post a new “Business Basics” piece to discuss subjects that readers, despite being aware of, may not know much about. With that in mind, one of the first subjects we are going to look at is the Benefit Corporation.

What is a Benefit Corporation?

Benefit corporations are a fairly recent, though the practice of chartering a particular mission for a corporation has existed for centuries. Early American corporations were occasionally given a particular public service to fulfill – things like building bridges or maintaining roads. However, the modern benefit corporation is a bit different – instead of merely fulfilling a public service, it has to produce a distinguishable social good for society.

Let’s say that you create a company with a particular social mission in mind – donating ten percent of profits to wetlands preservation, for example. If you wanted to incorporate your business and raise money through selling shares, you would have to give up some control of your company to the shareholders. That could mean that, instead of continuing its social mission, the company merely focuses on producing the maximum amount of profit. Creating a benefit corporation, however, will help ensure your company can continue its social mission, even if that mission cuts into profits. Unfortunately, benefit corporations are not universally recognized, though 12 states have, as of this posting, enacted legislation recognizing Benefit Corporations.

How do you create one?

Requirements vary from state to state, but typically creating a benefit corporation is very similar to the regular process for incorporation. However, along with filling out a standard Articles of Incorporation, you typically have to include some sort of statement attesting that your corporation is a benefit corporation, along with the specific public benefit, or benefits, your corporation will pursue. You can also elect to become a benefit corporation, though doing so usually requires that you amend your governing documents and get approval from the shareholders.

Are there any special regulations or rules for Benefit Corporation?

Benefit corporations are legally required to create a positive impact on society and the environment, and most states require that benefit corporations find a third-party standard to measure that impact. Happily there are many groups that provide a free assessment service, and there isn’t any particular standard that benefit corporations must adhere to. After receiving the assessment, the benefit corporation’s directors create an annual benefit report that they make public and send to the shareholders. Some states also require an independent ‘benefit director’ to sit on the board and prepare a statement on how well the corporation is adhering to its social and environmental mission.

Any benefits?

Except for protecting a corporation pursuing a social mission instead of maximizing profits, there aren’t really any legal or tax benefits to creating a benefit corporation. However, creating a benefit corporation can help you attract socially minded investors. In 2011, the Institutional Shareholder Service compiled a report that states investors are increasingly “incorporating social and environmental considerations into” their decisions. Having a recognized benefit corporation can give you an edge with these types of investors. Just make sure you are committed to your ideals before choosing to form a benefit corporation – in most states that recognize the structure, anyone with more than a 5% share in the company can enact benefit enforcement proceedings if they feel the company is not adhering to its social mission.

Though they can be a bit confusing, the recognition of benefit corporations is a great development in the business world. If anyone reading has further questions, just ask them in the comment box below and we will try our best to answer them!

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O is for Operating Agreement

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This week on the ABC’s of MyCorp, we’re focusing on the letter “O” for operating agreement. State laws are fairly lax when it comes to operating agreements – a handful of states require that an operating agreement be drafted, and even fewer require that Limited Liability Companies hold onto written copies of it. So, typically, LLCs choose to either forgo creating an operating agreement, or simply say that their operating agreement was agreed to orally.

However, the lack of government oversight for operating agreements does not make them any less important or valuable. Even if your LLC was created in a state without laws governing operating agreements, it is still a good idea to draft one and keep copies of it on hand for a few important reasons.

First, it cements your company’s status as an LLC and protects your, and your partner’s, personal liability. Yes, filing the paperwork and making your business an LLC in the eyes of the state does separate your assets from the business’s, but if debtors push you into court, having an operating agreement on hand will help to ensure that the court will see your company as a legitimate LLC.

It also helps to protect you if a business partnership turns sour. Oral agreements are all well and good when everyone likes one another, but how do you prove something was agreed to orally without a tape of the conversation? It is better to be safe than to be sorry, and putting all of the agreements between the members of an LLC into writing will help protect the interests of each and every member.

You should also be sure to clearly outline how ownership of the LLC is distributed amongst its members. Usually the percentage of ownership corresponds to how much investment capital a member gave to the LLC, but LLCs can divvy up ownership percentages on its own terms, and putting those terms and the corresponding percentages in an operating agreement is extremely important, especially if percentage of ownership is not directly influenced by investment.

The same concept is applicable to how an LLC distributes its profits and losses, especially if the LLC chooses to create its own system for its distributive share scheme. Profits and losses for an LLC are normally recorded as income for the LLC’s members as an LLC typically has a pass-through tax structure, and so the operating agreement should outline the system for, and frequency of, the distribution of profit and losses.

Finally, in the case of a member’s death, any agreement on the re-distribution of ownership should be made explicit in the operating agreement. An unexpected death or severe illness can cause a lot of turmoil within an LLC, and the last thing you want is for your business to be torn apart from internal bickering or threats of lawsuits. You can also take steps towards protecting your LLC from being dissolved by specifying specific conditions under which dissolution would be acceptable.

Clearly, an acceptable, comprehensive operating agreement is an essential part of forming a Limited Liability Company, even if your state’s government does not require LLCs to have one. Operating agreements are a great way to protect your assets and your interest in the company, so when you begin preparing to form an LLC, take the time to draft an operating agreement, or have one prepared for you. You’ll be happy to have that extra bit of insurance if things get a little rocky down the road.

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MyCorp Survey Results Revealed!

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Last month, we conducted our first ever MyCorp 2012 Survey for Small Business with five quick questions on the state of small businesses in 2012 and beyond with questions that focused on consumer spending, business spending, predicted growth of the business in 2013, the social media outlet you’re looking to establish for your brand, and quite literally the state of your small business – where you’re putting your business out on the map and which states are the most popular to form a small business in!

We tallied up the votes on Constant Contact, conducted the random drawing for our lucky $50 Starbucks gift card winner (congrats to Elizabeth Sneed!), and the results are in from our voters!

1) What State is Your Business In?

Four states vied for the top spot in our polls with New York taking in fourth place and Florida and Texas snatching third and second place respectively. The number one spot was easily no contest with California snagging top honors, with a healthy number of C-Corporations formed throughout the state as our infographic from earlier this summer showed!

2) 2013 Spending Budget For Your Business

2013 met a very close tie in two sectors at 32% respectively, as businesses in 2013 plan on investing in updated electronics and tech equipment and marketing, including SEO, PR, and social media for their companies next year. Taking in third place at 27% was employees – looks like businesses in 2013 will be expanding their teams too!

3) What Consumers Are Spending Income on in 2013

The holidays may be coming, but that doesn’t mean that our survey shows you’ll be carrying the expense leftover well into the new year! A little over 50% have bill payments on the mind to pay off in 2013.

4) Social Media Outlets – Which Will You Create or Expand in 2013?

Over 50% of you will making several status updates by creating or expanding on your Facebook accounts. Hopping in at 45% is LinkedIn with Twitter rounding up the trio at 26%. (Psst – MyCorp has all three of these accounts in place that you can follow us at!)

5) Your Business in 2013: Expecting Growth?

Our survey says yes! Over 80% of you expect your business to swim on over to the shores of success next year – and we here at MyCorp couldn’t be happier to hear it!

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Four Ways to Completely Ruin A Skype Interview

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Our CEO Deborah Sweeney wrote her Four Tips for Skype Interview Success over at the Forbes Blog last week, so we decided to write a response looking at the four ways to utterly ruin a Skype, or other video based, interview. Interviews via webcam are a fairly new thing, and most people have simply transferred what they would typically do in a phone based interview to their video interviews.

This guy is not being all that he can be.

But what if this interview is for a job you don’t want? How do you make sure you adequately scare away any potential employers and mark your Skype username as one to avoid at all costs. Well… we first off recommend you don’t try to scare away employers. A simple no will suffice if you choose to look for other avenues of employment. But, in the spirit of fairness and equality, here is our tongue-in-cheek response: four ways you can completely ruin any Skype interview.

1. Dress like you would at home.

There is no one to judge you when you are alone at home, so a stained t-shirt and some baggy sweats are perfectly fine if you want to spend the day vegging on the couch while watching re-runs of Maury. However, Maury isn’t going to hire you. One of the best ways to completely ruin your chances at landing this job is to dress like you aren’t going to be leaving the house for a few days. Unkempt hair, unshaven, dirty clothes; all of these and more can be used to thoroughly disinterest the interviewer. Don’t forget, they can see you and everything that you are doing on camera. When you are talking to someone on the phone, they may not be able to tell you haven’t showered in three days and are currently drinking a beer at 11 in the morning. On Skype, it is pretty obvious.

2. Use your regular username.

Are you known by the handle hotpartyanimal4567? Well then, you must be quite the hot party animal…4567. While that may be something you are willing to share with your friends, potential employers may not want to know your level of hotness or about your affinity for partying. If you want to ruin your chances of being hired, be sure to use the username you registered back when you were a Freshman in college and Skype was the hottest new thing. That is of course unless you have a normal username, like your actual name. Dialing that won’t leave a sour taste in the interviewer’s mouth and works to establish a good first impression. Or that you at least know how to register more than one username.

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Small Business Is BIG News

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