Step 1.1 – Your Type of Business Entity Does Count
Action Items for this Step:
- Set up a Business Entity or make sure your Business Entity is set up correctly
- Foreign File your entity if required (see Foreign File section in red below for more information)
Why do you need a business entity to build business credit?
It is best to build business credit with an LLC or Corporate (S or C Corporation). Creditors, Lenders, Trade Accounts and so on prefer to see an actual business entity. Furthermore filling and using a business entity to build business credit can seperate you personally from the liability of operating your business.
Unless you’re required to operate as a LLP or other type of partnership (Medical Practice, Law Firm, CPA, etc.), you should create a business enitity. Your personal and business credit can never be truly separated if you operate as a sole proprietorship or partnership – everything you do remains “personal”.
Form a Corporation or LLC
We highly recommend that you build business credit as a corporation or LLC. If you need to form a separate entity take 10 minutes to Save $30 Now on your LLC or Incorporation. In order to maximize your ;”fundability” and build a business credit profile that is separate from your personal credit you need to form a type of corporation or LLC.
Once you’ve formed a separate entity for your business, you must make sure everything relating to the business is done in the business name. You may personally need to sign for certain transactions, but your corporation or LLC is actually the “one” doing business.
*** Special Note ***
Foreign Filing Information
If the State where your business was formed does not match the State of its primary location then your business will need to file for “Foreign Corporation” status in the State where the business is located and does business from. For example, if your business was Incorporated in Nevada or Delaware, but its primary location is in California or New York, then you will have to file for Foreign Corporation status in either California or New York.
Please enter your current business entity status and the State where it was formed:
Business entity/structure type:
Select the State where your business was formed: