Question about getting incorporated!

[rinchip]

I work from home full-time for a company headquartered in PA. I'm living in NJ right now, and want to move to CA this summer. My boss told me it would be a big hassle tax-wise/insurance-wise if I don't move to PA.

I would need to get incorporated/start my own business out there to keep working for them, and "after I get my business set & need to get liability insurance."

She sent me these links to get started...

Incorporation Services - Incorporate a Business | LegalZoom.com (http://www.legalzoom.com/legal-incorporation/incorporation-overview.html)
NJ Division of Taxation - Starting a Business in NJ (http://www.state.nj.us/treasury/taxation/br1.shtml)

Does anyone have experience with this? I need guidance!

[vangogh]

This isn't my area of expertise, but I think your boss is greatly exaggerating the hassle. Maybe it depends a little on the specifics of your job so do share more details if you can.

For you to be in business for yourself about all you really have to do is declare to yourself you're in business. You should pick a name for your business and register that name with the state. That's usually done through the Secretary of State for each stats and odds are you can find all the info you need on their website. You can incorporate if you want, but you don't need to. Incorporating is more complicated than being a sole proprietor, but it shouldn't be all the hard either.

When it comes to working with your current company you should be able to work as you do now. The company will need you to fill out a form and they'll send you a 1099 at the end of the year detailing all the money they paid to you during the year. It's basically the W2 you get when you're in business for yourself.

As far as insurance is concerned it's up to you whether or not you need it. Again that could be dependent on the specific work you do. It's also dependent on what you potentially have to lose.

[Evan]

If you're working out of California, then presumably you are their California office and the company would need to seek recognition as a foreign business corporation with the California Secretary of State. They would also need to get all the proper permits to do business in the state and area, and remit taxes accordingly. It sounds like this is an arrangement they don't want, so they'd rather consider you a contractor and let you deal with the hassle of setting up shop. This doesn't seem like for the proper way to go, as there are differences between being a contractor and employee. Employee benefits (e.g. health insurance, disability insurance, retirement, etc.) would be on your own, no longer through this company. Insurance is also something you'd have to cough up...

Essentially, it sounds like they don't have any plans to operate out of California and you're on your own if you want to go that route, and still bring them business. If you're going on your own, it's not like this company would be your sole provider, as if it is, the arrangement seems to be more of an employer-employee than a true "contracted" relationship.

[C0ldf1re]

I can answer for the UK. Incorporation is very easy and cheap. It has major tax advantages. It is also a good PR step, as it makes you seem like a "proper" business.

[MyITGuy]

Incorporating isn't a big issue, my company is registered as an S-Corp and I don't remember to much paperwork being involved, but I do have to renew every year (Check out Intuit or LegalZoom...I remember using one of them for this as their fee was zero and I just had to pay the state fee)

I do have to submit a document online every year and pay a renewal fee...but that only takes 2-5 minutes.

Regarding the situation, the only advice I have to offer is to research and compare your current salary/benefits versus what you would have to pay your self from your company and ensure that your "client" compensates you appropriately. I.E. If you're making 50K a year with a 401K, Dental, Medical and Life insurance that the company contributes to, you don't want to start your own company and they still only continue to pay you 50K as now you will definitely end up with less take home pay once everything is said and done.

[tylerhutchinson]

In California (where I am) it is actually very simple to get set up. You need to register in your county for your name, set up your Fed pin if you haven't already, and then file for any permits you may need. You can find all the information on the California website. Almost every form you need you can print online and fax in. I got mine done very quickly and it costs very little in fees also.

Good luck!