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Business Formation

The first 90 days of a new business, in the order that saves money

Entity choice, EIN, licensing, payroll accounts, and S-Corp election timing — sequenced so you don't pay twice to fix it later.

· 7 min read

Julius Ndahiro, Managing Partner & CFO at NEXACCJulius NdahiroManaging Partner & CFO, NEXACC

Entity choice comes before anything gets filed

LLC, S-Corp election, or C-Corp is not a preference — it follows from expected profit, number of owners, payroll plans, and whether outside investment is coming. Filing first and asking later is the most common and most expensive order of operations.

The cost of getting this wrong is rarely the filing fee. It is a year of payroll tax treatment you cannot retroactively change.

The sequence that avoids rework

Entity formation and operating agreement, then EIN, then state and city licensing, then sales tax and payroll accounts, then the bank account, then the accounting file and chart of accounts. Each step depends on the one before it.

Skipping ahead to the bank account is what usually forces the whole set to be redone under a corrected entity name.

Election timing is a hard deadline

An S corporation election has a filing window tied to your formation or tax year. Miss it and reasonable-compensation planning simply does not apply for that year.

We put the election date, the first payroll run, and the first estimated payment on a single calendar at setup so none of them arrive as a surprise.

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