How to start a company

I’ve been making and producing music for years. I’ve been interested in getting some of my music (hip hop, trip hop and electronica) in commercials because It’s pretty similar to things already out there, and it’s good money I could make on the side. At the moment I already write and produce music, and I’m interested in starting a one man production company and launching a website for it. I don’t really expect business, but I figure I’ll put something up, and if something comes my way great!

So I want to make this legit, but I have no idea where to start. I assume I’ll need some type of business or tax ID? What about LLC, or Corp or any of that other stuff? This will be a very simple little company, but I want to make it legit. What steps do I need to take in order to accomplish that?


The steps necessary to form a LLC or Corporation vary by state.

I highly recommend Nolo Press’s books on the topic and their website (which has a good overview of the different forms of company).

Nolo’s Starting a Business Website

Nolo’s Form Your own LLC book.

I formed an LLC in New York once. I had a lawyer prepare the forms for me, this plus various application fees and whatnot cost about $350 altogether as I recall. That got me an LLC registered with the state and a federal tax ID-number. Those forms then got me a business checking account and I was on my way.

I’ve since dissolved the LLC, that took another form and was a lot easier than setting it up.

I’ve done it several times in three states. It’s not difficult. The easiest way is to consult an attourney. It should only cost a couple of hundred dollars.

If you want to do it yourself you can. Google up your states corporation commission or secretary of state. That should have links to get you started.

Oh, and if it’s just you (no partners) and it’ll be small (a side business type of thing) I heartily reccommend forming an 'S" corporation. This is a corporation type that allows all the earnings to hit your taxes and avoid corporate taxes.

So instead of the corporation being taxed (Tax 1) and then YOU being taxed when you pay yourself (Tax 2) it all goes straight at you and there’s only one tax hit.

I have an LLC in NYS. A couple things:

  • some states don’t allow single-member LLCs. You may have to either get a partner or, more likely, try an S-Corp.

  • See if you even need an EIN (Federal Taxpayer ID), or if you’r be better off just using your SSN as an independent contractor:,,id=97872,00.html

  • In NYS, forming and maintaining an LLC is not all that cheap. It’s not killer, but considering that many folks involved in “side businesses” are often only making annual profits in the 4- or 5-digit range, it can be a shock, esp. at the beginning. For my LLC, it costs $500 a year in fees. But the initial setup cost around $1300–there’s a publishing requirement, where you have to publish, for 6 weeks straight, in 2 different newspapers (of the county clerk’s choosing), a public notice of the formation of your LLC. 'Spensive.

  • Make sure you know why you’re forming the LLC/etc. One advantage is that, should you go bankrupt, get sued, etc., there’s a barrier between the business assets and your personal assets. Of course, this also means that, to truly be on the up and up, the business needs to buy all of the recording equipment you need. Furthermore (at least in NYS), you, as a business, are required to pay state use tax on everything you buy for the business. This means that, if you buy the next version of ProTools over the Web and don’t pay any sales tax … you’ll have to pay the sales tax amount to the state later as “use tax.” Fun, no? Prepare for massive recordkeeping!

Thanks all, you’ve pushed me in the right direction. I’ll be checking these things out over the next few days and will post any questions I have here. I feel that I would have a better chance of “attracting” business if I’m legit as opposed to some schlub working out of his bedroom, plus I’d like to say I own my own company! :stuck_out_tongue: It will basically be a freelance type of thing, so the “S” type sounds like the way to go.

I’ve used a few times.

Bear in mind that what everybody here (including myself in the above sentence) is talking about is setting up a corporation or an LLC. Which isn’t really what you asked about. To set up a company, all you need to do is get a business license in your local town. To be a sole-proprieter business, you don’t even need an EIN from the government; you pay taxes using your SSN.