Due to the recent tax laws, many actors are weighing the options of turning their business into a corporation. In most cases, becoming an S-Corp.
There are many financial variables that go into deciding to incorporate. There’s a great discussion of it in this episode of Audrey Helps Actors. And if you’re seriously considering making this move, I recommend talking to one of the fine tax preparers at Chuck Sloan and Associates. They can take a look at your unique situation and help you make a good decision for your business.
But let’s say you’ve decided that becoming an S-Corp is a good idea. One of your first steps will be to give your corporation a name.
What should you name your S-Corp?
Ultimately, the decision of what to name your new business is limited only by your imagination and what has not been previously taken by other corporations. But there are a few things to consider.
What about going with [YOUR NAME] Inc.?
This is a perfectly fine choice, but like anything, it has pros and cons.
It’s easy for people to remember and spell.
If people forget to write a check to your corp, instead of you personally, you can often add the “inc” at the end, no problem. Since you can’t deposit checks to your corp bank in a different name, this is an easy way to solve that misstep quickly.
Because many payroll companies use “autofill” features in their software, there can be mix-ups between checks that should be paid to you personally and ones that should be made out to your corp. Remember your checks go through a long journey and multiple systems before they get to you, leaving many chances for a mini-snafu.
A corporation’s business address is searchable public information. Unless you plan to have a P.O. Box, you’ll likely use your home address for your corporation. Having the business name as NOT your personal name makes it less likely for people to stumble upon your home address.
A different company name helps separate you from the corporation in case of a lawsuit, making it less likely that someone would be able to come after your personal assets in addition to the corporation.
Consider Differentiating your Corp name
If you want to keep things nice and clean, my recommendation would be to differentiate your name enough to avoid the autofill problems. For example, if your SAG-AFTRA name is Susan Hillford, you might consider Hillford Inc. You’re still keeping it in your name, but making check processing a little easier.
Your final option is to go nuts and call your company whatever you want. My reminder to you is any paychecks will be made out to this name. Choosing a name that’s easy to spell correctly and remember can save you headaches down the road. So while “Su·per·ca·li·fra·gil·is·tic·ex·pi·a·li·do·cious Inc.” is really funny, it might not be the best strategy to get you paid quickly.
There you have it. This is an important decision, but nothing to stress over. Weigh these options and go with your instincts.
Becoming a corporation means you need to be extra diligent in knowing your company’s income. If you’re not ready for the full-monty of Quickbooks, grab our FREE Income Tracker below. It includes a video walkthrough to help you use it!