The Difference Between a Part-Time and a Full-Time Employee

When setting up a limited liability company or LLC, you’ll need to open a bank account. This is a requirement for every business operating as a separate legal entity from its owner.  In this article, we will cover everything you need to know about opening a bank account for an LLC. We'll discuss the pros and cons, what documents you need, and other important considerations. Why Should Your LLC Have a Designated Bank Account? By forming an LLC, you're essentially declaring that you and your business are separate entities. As such, one of the benefits of having a business bank account as an LLC is that it provides liability protection, shielding your personal assets.  Protecting Yourself if Your Business Gets Sued If your LLC is sued, the plaintiff can only go after the assets of the LLC and not your personal assets. While new businesses generally don’t think about the prospects of being sued, this is the safest route in case something goes south. A separate business account can be especially helpful if you are the sole owner of the LLC. Easy Management of Your Business Finances Another benefit of having a bank account as an LLC is that it simplifies business accounting. Having a separate business bank account for your LLC can make it easier to track expenses and income, both for you and your bookkeeper, which can be helpful come tax season. When the time comes to file your taxes as an LLC, you don’t have to go through the hassle of separating your business and personal transactions within your personal accounts. Small businesses generally have to pay estimated quarterly taxes, and an LLC business bank account is sure to speed up and simplify that process. Looking Professional  Another benefit of having an LLC account is that it makes your business appear more professional. If you are dealing with clients or vendors, they may be more likely to take your business seriously if you have a separate business account. Now that we've discussed the benefits of having an LLC account, let's talk about how to open one. How to Open an LLC Bank Account The first step is to choose a bank. When it comes to choosing a bank for your new business, there are a few things you'll want to keep in mind.  The first thing to figure out is whether you wish to go with an online bank or a brick-and-mortar one. Both solutions have their pros and cons, so make sure the bank offers the services you need. For example, if you need to deposit cash remotely, make sure the bank offers online banking. If you plan on using your LLC bank account to pay bills, make sure the bank has bill pay. Also, make sure to check online reviews on the quality of customer support the bank provides. Another thing to keep in mind when choosing a bank is fees. Some banks charge monthly maintenance fees, while others don't. Overdraft fees also have the tendency to eat into your business profits. Make sure to research the fees associated with different banks before making a decision. You should also check whether the bank of your choosing has other useful components that you can use in the future together with the LLC checking account. For example, if you think you may need a business loan to kickstart your operations, get details about interest rates, loan terms, and revenue requirements. It might also be a good idea to check for different types of accounts available and select a bank that offers all the types you need or might need in the future. How to Choose the Type of Business Bank Account for Your LLC There are a few different types of business accounts that are available to LLCs. The most common type of account is a business checking account. A business checking account and a relevant debit card are a good option for LLCs because they allow you to easily access your money and make payments. Another type of bank account available to LLCs is a savings account. This is a more appropriate option if you want to earn interest on your money or if you want to set aside money for taxes. If none of the aforementioned LLC bank accounts are suitable, you can open a money market account. This is a solid option for LLCs that want to earn interest on their money but still have access to it when they need it. What Documents Do You Need? Before opening an LLC bank account, you'll need to compile a short list of documents. Although different banks have different requirements for those looking to open a bank account for an LLC, there are a few common must-haves.   LLC’s Articles of Organization: In some states, this is referred to as a certificate of formation or a certificate of organization. This is the document that outlines the initial statements concerning the formation of the LLC. You can get this document in the state where your LLC is formed. Government-issued photo ID: You’ll need to provide a valid driver's license, passport, or another type of personal identification when opening a bank account for an LLC. EIN: This is short for Employee Identification Number, and it serves as your LLC’s federal Taxpayer Identification Number that is used by the IRS in the administration of tax laws. The process of opening a bank account for other types of businesses may differ. For example, a sole proprietor needs to provide a Social Security number.    LLC operating agreement: These are documents filed with the state that give the bank the needed information about who has permission to use the account or draw funds from it. In most cases, these documents should be sufficient to open your LLC's bank account. What to Keep in Mind One of the more worrisome aspects for business owners who have employees and wish to set up a business bank account is the danger of losing control over their finances. You should look into your options before you authorize your employees to use the account. Some banks may take advantage of your status as a new business owner, using it as an opportunity to sell you bigger or fancier checks than what's necessary with their special business bank account for LLC introductory offers. Also, be mindful of the minimum monthly balance and similar requirements that could be costly for small businesses. Business Credit Score Another thing to keep in mind when opening a bank account for an LCC is its impact on your business' credit score. Just like you have your individual FICO score, your business will also have one that you'll have to build and maintain.  This score will be used by banks and other lenders to determine your company's creditworthiness in case you need a loan. It will also be evaluated when you are renting office space or searching for a business partner. Unlike personal credit scores that range from 300 to 850, a business credit score typically ranges from zero to 100. Dun & Bradstreet, Experian, and Equifax are the three major bureaus that determine a business credit score.  When you are setting up a bank account for your LLC, make sure you know which bureau the bank reports your transactions to. There is no single algorithm for determining a business credit score, and each of these bureaus will calculate it differently. Another significant difference between a personal and business credit score is its accessibility. You are entitled to a free annual credit report from each of the three bureaus. But business owners that would like to stay informed about their business credit score have to pay for it and specifically order it from one of the three bureaus listed above. It certainly pays off to maintain a good business credit score through your LLC bank account so you can take advantage of loans, insurance policies, and banking terms that are more favorable. All in All The information outlined in our guide will make it easy for you to set up a bank account for your LLC. Just remember to collect all the necessary paperwork and educate yourself about what different banks offer.

Business credit cards offer a number of perks to business owners, regardless of the size of their operation. In addition to rewards and welcome bonuses, business credit cards also tend to have higher credit limits than personal ones. The obvious benefits lead many professionals to ask one simple question: should I get a business credit card? In this article, we will tell why it’s a good idea to apply for a business credit card and walk you through the eligibility requirements. You May Be Eligible and Not Know It You may have convinced yourself you can’t possibly obtain a business credit card because you don’t own a large company or even a small business in the traditional sense. But do you need a business to get a business credit card?  When you hear the term business owner, you probably think of someone running a company with a number of employees. However, you don’t need to be incorporated or have a formal business structure to qualify for a business credit card. You are eligible even if you are self-employed and working as a freelancer from home. That said, the options offered to a contingent worker, for example, are bound to be limited. As such, you need to do your homework on what cards are available to you. On the other hand, if you own a company and need a business credit card, you can explore the list of the top business credit cards on the market.  It Can Help You Boost Your Credit Score So why get a business credit card in the first place? Getting a business credit card is a great way to raise your personal credit score. A business credit card enables you to reduce spending on your personal one and use less of your available credit. This and covering any work-related expenses with a separate card will boost your credit score. However, keep in mind that when you apply for a business credit card, you may initially lose anywhere between two to five points on your credit score. That’s because financial institutions usually evaluate your creditworthiness by pulling your personal credit report when you’re applying for a card.  This is done to determine whether you’re eligible for a new credit card, and it’s the only part of the process that negatively affects your credit score. After the credit inquiry, your personal and business lines of credit are kept separate, and your score won’t be affected by your credit utilization ratio.  This doesn’t mean that you can afford to be irresponsible about your spending with your business credit card. If the card is tied to your Social Security number and your business defaults, you’ll still be held personally responsible for the money spent. It Allows You to Separate Your Business Expenses From Your Personal Ones Using a business credit card for personal purposes is usually considered bad practice. It can be quite a hassle when the time comes to file your taxes and sort through your credit card statements. Choosing a business credit card over a personal one for your business allows you to have a clear insight into your business expenditure. Furthermore, you will save on accounting expenses, as there will be less work for the accountant since they will have fewer expenses to go through.  That’s not all. Many business credit card issuers allow you to export your expenditure details to accounting software such as Quickbooks. This can exponentially speed up the accounting process. It Enables You to Improve Your Cash Flow One of the main reasons to have a credit card is to gain access to a line of credit. It’s also easier to qualify for than a bank loan. Since even a new business can get a business credit card, this is an ideal option for startups to secure the necessary cash flow to expand their operations. Having a business credit card enables you to pay your contractors and suppliers upfront while simplifying the transaction process. Some vendors offer discounts for those who have a good track record when it comes to making payments early or on time.   To avoid high-interest payments or other more extreme unpleasantries like having to file for bankruptcy, make sure to cover your entire balance on time.  It Offers Many Convenient Rewards Regardless of whether you get a business credit card or a personal credit card, you’ll likely be treated to a few generous rewards. There are typically three kinds of rewards: Miles Cashback Points  If you aren’t sure how to use business credit cards in order to make use of these rewards or you find the rewards programs too complicated, you’re not alone. A lot of cardholders don’t actually know how rewards on credit cards work. The important thing to remember here is that these programs reward you for the money spent through your line of credit.   Some business credit card issuers offer rewards in the form of discounts on everyday purchases, while others offer discounted flights, hotel stays, and gift cards. Therefore, if this is something you need for your business, such rewards can be very valuable. It Comes With More Generous Sign-Up Bonuses A major difference between a business credit card and a personal credit card is that the business ones usually offer bigger welcome bonuses. Given that you’re likely to spend more for business purposes than you would for your personal expenses, these bonuses can really come in handy. For example, with the Ink Business Preferred Credit Card, you can earn a 100,000 bonus for spending $15,000 within the first three months. You can redeem the points by getting $1,000 cash back or spending $1,250 on travel expenses. To put things into perspective, a similar personal credit card, the Chase Sapphire Preferred Card, gives you 80,000 bonus points as a welcome offer after spending $4,000 in the first three months. The maximum bonus value for the Ink Business Preferred card is 1,250, while for its personal counterpart, the maximum value is $750. Many business credit cards have 0% APR for a certain period of time, which can exceed 12 months in some cases. This can be very helpful for small startups, which often need to cover a range of investments on a limited budget. Not having to pay the interest rate for at least a year gives them time to get their business up and running. You Can Get Free Employee Cards Finally, many business card issuers offer free employee cards, which can significantly simplify making business-related purchases. For instance, employees can use the card for business trip expenses.  With employees having their own business cards, the business owner won’t have the extra task of repaying the employees, and the workers won’t have to use their personal cards. The employer can set the limit on these cards to prevent overspending. Final Comments As you can probably tell, business credit cards are a great asset to keep your business running smoothly. If you’re still wondering do I need a business credit card, remember that this is a great way to boost your personal credit score, separate your business expenses from your personal ones, and take advantage of some generous rewards and bonuses.

Even though they aren’t easy to find, angels do exist and are definitely worth the quest. Keep in mind, though, that they dwell solely in the world of entrepreneurship. This article will provide some insightful tips and tricks on how to find angel investors so that you can start funding your startup and seeing your professional dreams come true. What Are Angel Investors, and What Do They Do? Angel investors are a special breed of investors. They are typically high-net-worth individuals who invest their own money in early-stage startups. Their motives stem from believing in the company and its team and wishing to see the startup succeed.  Unlike venture capital firms and venture capitalists, angel investors are not looking for a quick return on their investment. They are willing to wait longer to obtain profit and are often hands-on with the companies they invest in. Taking on more risk than traditional investors, angel investors typically require a higher rate of return on their funding. Consequently, they can earn a much higher payoff once the company has become successful. Due to the uncertainty involved in this type of financing, finding angel investors might be a bit tricky.  Angel investors are an essential source of funding for early-stage startups. They provide the capital indispensable for startups to get off the ground and grow. In addition to bringing capital, angel investors often serve as mentors and advisers, helping founders tackle the challenges of building a successful business. Without them, many promising companies would never have gotten started. How To Find Angel Investors for Your Startup Here are some tips and tricks that’ll help you navigate the sphere of entrepreneurship and inspire angel investors to bestow their benevolence upon your startup: 1. Do Your Research The first step in raising capital for your venture is conducting preliminary research. It’s a good idea to identify investors who are the best fit for your company based on their previous activities. There are a number of resources available online that can help you with this process. The Angel Investor Directory, for example, lists angel investors by state, mentioning what their preferred sectors are. You can also optimize your hunt for a perfect angel investor on websites such as AngelList, a popular platform that connects startups with potential backers. It has funded more than 12,000 startups and has $10 billion in assets supported.  In addition, you can create a profile with Gust, a global platform that provides angel groups with tools to facilitate quality investments, or Angel Investment Network, another great website that brings together businesses and investors.  Finally, we recommend you join the Angel Capital Association, the world's largest network of angel investors with a community of more than 13,000 accredited investors. 2. Contact Angel Investor Networks If you’d like to know how to find legitimate angel investors, the best advice is to network at all times. Start connecting with as many people in the startup community as possible. Attend startup events and meetups, getting to know the angels who are already investing in startups. These connections will give you a chance to encounter an aspiring angel investor who might be interested in your company.  Once you get to know the right people, they may be able to introduce you to future investors. Focus on business owners, as they will likely think about funding small businesses at one point in their entrepreneurial journey. If you’re wondering where to find angel investors, you should join business associations, civic and community organizations, and attend trade fairs and events. Mingling with like-minded individuals will help increase your chances of bumping into the right angel investor. 3. Use Social Media Social media is a convenient tool that can be used to connect with corporate investors. An excellent platform for connecting with business professionals, LinkedIn is a good way to find out about investment opportunities. Twitter is another useful platform that can help small business owners secure early-stage funding. You can promote your company on Twitter and reach out to future investors.  To find an angel investor that’s a right fit for your business, you can also use Facebook. By posting regularly, you can promote your company and connect with angel groups. Start by telling your story, then build an audience, and inspire some of them to reach out to you first. If not, don't be afraid to make the first step and get in touch with potential investors. 4. Give Presentations Presenting your business idea and strategy is another excellent way to connect with those who could provide the funding your startup needs. This is an opportunity to showcase your company in front of a group of people and get them excited about the work that your company is involved in. If you're planning on giving a presentation, make sure it's professional and engaging. You want to leave a lasting impression on possible investors, so make sure your presentation is polished and bulletproof. Your story is what will make you stand out from the hundreds of other startups pitching to investors. Tell a narrative that captures the attention of potential angel investors for startups and makes them eager to invest in your operations. Focus on why you're starting your business, which unmet need you’re addressing, and how you're going to make money. 5. Make an Impactful Pitch Deck Looking for an angel investor can be a daunting task. Once you've identified potential investors, the next step is to pitch your business ideas. Devising an effective pitch deck is a critical piece of the puzzle as it will be the first impression that investors have of your company. Make sure that your pitch deck is clear, concise, and persuasive. Investors should be able to understand your business model and see the potential for growth. It’s also advisable to indicate what’s in it for them if they decide to provide backing. Angel investing requires having a meticulous plan in place, so make sure to include key data points around projected revenues and market share to demonstrate the potential of your vision and business model. Here’s how to find angel investors for your idea and pitch your business at the same time: include a clear description of your accomplishments and team capabilities based on their track records, as well as details about your current stage of funding or development. Ultimately, the objective of your pitch deck should be to show that you have what it takes to bring your concept to fruition. 6. Try Online Crowdfunding Crowdfunding is a great way to raise money for your business, and it's also a chance to connect with potential angel investors. When you run a successful crowdfunding campaign, it shows potential investors that there is interest in your company. Attracting individuals who are willing to fund your business idea then becomes a piece of cake. There are a few crowdfunding platforms you can use while looking for angel investors, such as Kickstarter, Indiegogo, and GoFundMe. Choose a platform that's right for your business and start promoting your campaign. Statistics show that successful crowdfunding campaigns raise an average of $33,430, so why not give it a try and see if you can spot some angels along the way. 7. Ask Family and Friends Seeking investment from those who are closest to you for the project you believe in can be a great idea. But before you start sending out feelers, it is important to understand that this comes with its own challenges. Knowing how to find angel investors among family and friends is a skill that can bring in substantial funding. When raising money from your loved ones, it’s essential to set expectations from the beginning and agree on certain boundaries. This means being clear about how much money you are looking to raise and what the terms of the investment will be.  Another thing to keep in mind is that, while your relatives might be personally invested in your venture and therefore quite forgiving, you still need to make sure that you are using their money wisely. It’s best to have a solid business plan and direct the funds solely toward growing your business. What To Look For in an Angel Investor? When learning how to find and convert angel investors, you should take certain factors into consideration. First and foremost, ensure that you’ve chosen someone whose previous performance has been exemplary. An accredited investor who has a history of successful investments will be much more likely to help your venture succeed as well. Additionally, it’s important to seek out an investor who shares your long-term vision and values. This will help you avoid any potential conflict down the road and ensure that your company is aligned with your investors’ interests.  It’s always prudent to seek out angels with deep pockets. Knowing who angel investors are and how to find them isn’t enough if they don’t have ample funds. Whether they have access to large amounts of capital or just a strong network of investors, having financial support from multiple sources can help keep your company on track during difficult times. When approaching individuals whose wealth can contribute to your business, don’t forget their mentorship ability. A capable angel investor should provide professional guidance alongside financing. As they have likely been through the startup process, they could offer advice on everything from developing a business plan to hiring employees. Having a seasoned mentor on your side can help you avoid common mistakes and make the most of your limited resources. Bottom Line Now that you know how to find real angel investors who possess the right combination of skill and resources, you can onboard someone to take your company to new heights! It’s good to have realistic expectations, though. Not every potential investor will be interested in your business, and you should not take it personally if they decline to invest.  Remember that even the most promising startup will likely face challenges and setbacks along the way. That’s why you should be prepared for bumps in the road and have a solid plan for how you will overcome them. With hard work and dedication, you can achieve your goals and make your business thrive.