Harold
BUFFALO,#2Consumer Suggestion
Thu, November 22, 2007
Having started/incorporated 2 corporations myself, both successfully, I can assure you, anyone can do it without being ripped off by Ray Reynolds and company. The reason he gets away with his unethical marketing is because many of the people who watch or listen to his commercials wish to incorporate for all the wrong reasons and have little or no knowledge about how a corporation works. To incorporate is NOT the way to build credit for yourself. If you have poor credit yourself (which is usually the case with many who have gotten scamed by RR), you will also have a tough time getting any credit for your corporation. Regardless of what RR says, the financial history of one of the corporate principals is linked to the corporation. No creditor in his right mind will give a brand new corporation much credit without a PG from one of the principals. Once a PG is required, the corporation is useless for building credit if the individual has poor credit. In addition, the PG takes away the protection gained by being a corporation. Without having to send me any money, here is how I incorporated already twice. I went on the net and looked up the few companies which incorporate you for a fee. The fee is anywhere between $150.00 for a bare bone corporation (that is all you need) or a few hundred dollas for fancy forms and seals, etc. I used a company which has been around forever, The Co. Corp. in Delaware. I thereafter contacted the IRS and applied for my EIN (Employer Identification Number), also called your Federal Tax ID. With my incorporation papers and Tax ID number in hand I called local banks to find out if they also handled commercial accounts. Some did, others did not. I asked the banks which handled commercial accounts what documents are required in order to open an account with them. Note, the rules have changed since the introduction of the Patriots Act. Banks require full disclosure as to who are the principals in the corporation. Some banks also required that your "foreign" corporation be on file with the Secy. of State in your State. If this is required you must rethink your situation, as all the State Tax you wish to save by incorporating in a corp. friendly state like Delaware is lost if you also have to register your corp. in your state where the corp. taxes may be higher. In any case, try to find a bank which does NOT require you to also register the corp. in your state if you wish to save some tax dollars. Having opened your corp. bank account, now the fun begins. What is the purpose of your corporation? Your corporation must fit into a category. To get credit is not a category. Let us assume you have found a category, apply for credit (line of credit) with your bank. This usually comes in form of overdraft protection or a small loan. Unless you get an SBA loan, your persl. credit history and credit will dictate if you can get a corp. loan as you will have to sign a PG for this loan. In other words, you will have to secure the loan. The claims RR makes about unsecured credit is nonsense. No legit. financial institution will give your corp. any credit w/o a financial history and having none, the loan or line of credit will require it being secured by/thru someone with credit. There is no free lunch. Now, how do you build such credit? There are some merchants who will give you some credit w/o a history, like some cell phone companies. Get a cell phone in the corp. name and pay the bill religiously. Also contact D&B and have your company registered. Creditors will look for your D$$$ rating before they give you any credit. This all takes time and you will need to stay on top of all the reports you must file with the IRS and your State. Miss filing the required reports and you will end up being fined by the Feds and your State. Now only because you bought something in the name of the corporation does NOT mean it is tax free. You have to declare your income and expenses in your annual tax return for the corporation. Going on vacation is not a business expense unless you are a travel agent. Buying a sports car is not a legit business expense if you claim to be a delivery company. The same with your household appliances and even your gasoline. There are ways how you have to account for the mileage driven on behalf of the corporation. The bottom line - you do not need to be ripped off by RR. You can incorporate yourself for much less money. Find a good accountant and spend a hr. with him. He will let you know what to do. That is money well spent. In closing, if you are a financial disaster in your persl. life, chances will be your corp. will be no better. Bad habits are hard to brake and if you lack financial discipline you have no business playing around with incorporating.