Incorporating Your Affiliate Marketing Business

One of the first steps I’m taking is getting my business incorporated.  I already have one corporation which I do some consulting under and which I run my InspiredMoneyMaker.com site under as well, but for my Affiliate Marketing business I wanted to keep everything separate.

I don’t know how difficult it is in other countries, but here in Canada the process of getting a company incorporated is pretty simple.  You simply call a lawyer who does incorporations and they walk you through all the steps of getting a company setup.

The first thing they’ll want you to do is to pick a name for your company and they have to run a name search to determine if it’s taken or not.  This is similar to finding an unregistered domain name.  Once they verify that the name you’re picking for your company is unique (at the Provincial, State or Federal level) they can begin the process of getting your company setup.  It typically takes a few days to run a name search and about a day to process the incorporation.  I started the process on Tuesday, and I think everything will be done before Friday if the name I picked goes through.

If you’re the only person involved in the company, you’ll act as the CEO/President and Director all in one.

Why Incorporate?

There are many reasons to incorporate a company, but the main reasons I decided to incorporate this venture were:

• Limited Liability. By running your business through an incorporated entity, should there come a time when someone sues you for something dumb, the worst that they can do is to go after the assets of your company, but that’s where the liability stops.  They can’t go after your personal assets, etc.  Although I don’t plan on getting sued for anything, it’s more of an insurance policy of “just in case”.
• Investor Potential. By starting the company out as a corporation from the start, it allows me to potentially attract investors for the business.  I can sell shares to someone in the future who may be interested in investing.  By having an incorporated company from day one, potential investors know you’re serious about your business as well.
• Sets the Tone For Growth. By going through the trouble of incorporating, setting up a formal share structure, corporate bank accounts and all the hoopla, you’re sending a very strong message to your subconscious mind basically saying “I’m serious about this thing!”
• Tax Benefits. There are many tax benefits to having an incorporated company.  It allows you to write off certain expenses you potentially couldn’t write off if you were running a sole proprietorship.
• Separation. It allows you to keep everything separate from your other businesses.  You have to file a separate tax return, keep separate bank accounts etc. which forces you to be more organized and “clean” with your business processes.  It also allows you to potentially qualify for business loans in the future as banks can treat a corporation as it’s own entity with it’s own credit score.

Those are the main reasons I decided to incorporate a new company.  The best thing to do is to do some research on the types of corporations available in your area and see what benefits they offer you and then contact a lawyer when you’re ready to get setup.  It really isn’t a very involved process.  A lot of people make a much bigger deal out of it than it really is.  It took me about 15minutes on the phone with the lawyer to tell him exactly how I wanted to get it setup.  Of course this isn’t my first time doing this so I know what to ask for, but it’s not really a hard process.  I *do* recommend doing your own research on how corporations work BEFORE talking to a lawyer though, unless you’ve got money to burn on getting educated by a lawyer on the clock.

What does it cost to incorporate?

Of course the costs will vary depending on where you live, but it’s going to cost me between $1,000-$1,250 to get everything setup and properly incorporated and then another $250-$300/year to maintain the legal status of the corporation in good standing.

If you’re serious about doing some serious affiliate marketing revenues, I think it’s a must.

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