If I Was Starting My First Business
by Charlie Carroll
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After starting over 50 businesses, I've learned a thing or two about setting up a new venture. I think it’s fair to say I have lost hundreds of thousands of dollars due to improperly setting up a business. So, yes, this post could be worth thousands to you! If I were to start my first business today, I'd have some new tricks up my sleeve. Here’s one intriguing strategy: starting an Ohio company owned by a Montana company in order to protect the identity of the owner. Keeping the identity of the businesses ownership private protects an owner in many ways to include shielding you from the tens of thousands of companies that hunt for new businesses in attempt to sell them services. You can always tell people you own your business but there are a lot of advantages to not allowing people to rummage through your private information and business information online.
The Ohio-Montana Connection
Why Montana? Because it’s one of the few states that allows for anonymous LLC ownership. By setting up a Montana LLC to own your Ohio company, you can effectively shield your identity from prying eyes. The play-by-play:
- Form Your Montana LLC: Start by forming an LLC in Montana. This LLC will be the parent company of your Ohio business. The beauty of a Montana LLC is that it doesn't require you to list the names of the owners in the public records, keeping your involvement discreet.
- Register Your Ohio Company: Next, register your Ohio business as a subsidiary of the Montana LLC. Now, your Ohio company is officially owned by your anonymous Montana LLC.
- Agent of Record: To further protect your identity, use a law firm as the agent of record for your Ohio business. This way, all official correspondence goes through the law firm, adding an extra layer of privacy. This will cost you less than $1k a year. (It’s worth it!)
Now What?
Now that your Ohio company is set up, it's time to get your business operational:
- EIN: Apply for an Employer Identification Number (EIN) from the IRS. This is crucial for tax purposes and will be needed to open a bank account.
- Business Banking: With your EIN and incorporation documents in hand, open a business bank account. This will help keep your personal and business finances separate, which is vital for both legal and organizational purposes.
- Accounting: Implement an accounting system to track your income and expenses. Consider using software like QuickBooks for ease of use and efficiency.
- Taxes: Ensure you register for any state-specific taxes in Ohio. This might include sales tax, unemployment insurance tax, or other state taxes applicable to your business.
- Insurance: Protect your business with appropriate insurance. General liability insurance, property insurance, and workers’ compensation insurance (if you have employees) are a good start.
- Permits: Make sure you have all necessary permits and licenses to operate legally in Ohio. This will vary depending on your industry and business type.