The Launch Blog: Expert Advice from the CorpNet Team
Small Business Tax Advice and Survival Guide
Tax season comes to all businesses big and small, and can be a headache no matter how well you think you’ve prepared. For a small business owner wearing many (or all) hats in the business, it’s an unwelcome extra task sure to cause late hours and frayed nerves. To handle the additional workload during tax season, CorpNet offers some small business tax advice and presents our Tax Season Survival Kit for business owners. Step 1. Gather All Necessary Documentation The first step in preparing for taxes is gathering any necessary documentation. Ask your tax accountant for the list of figures...
Should My LLC Be My Name?
If you’re starting a business and planning to operate it as a Limited Liability Company (LLC), you may be struggling to decide what to name your company. Should you include your personal name, or would it be better to register a more conceptual or catchy name as your LLC’s legal name? The short answer is: It depends. There is no right or wrong answer. Ultimately, as long as an LLC name complies with the state’s laws and no one else has already claimed it, whether you use your name for your LLC is a matter of preference and what will work best for your situation. Advantages of including...
Can a Single-Member LLC Be an S Corporation?
A single-member LLC can be taxed as an S Corporation if it meets the IRS’s eligibility criteria. In fact, both single-member and multi-member Limited Liability Companies can elect to be treated by the IRS as either an S Corporation or a C Corporation if they meet the requirements. IRS's S Corporation Qualification Criteria: Be a domestic corporation or an entity eligible to be treated as a domestic corporation. And not be an ineligible corporation (such as certain financial institutions, insurance companies, and domestic international sales corporations. Have only allowable shareholders...
What Happens When an LLC Owner or Member Dies?
Since a Limited Liability Company (LLC) can have one owner or an unlimited number of members, it’s not uncommon for an LLC to experience the death of one of its members. What happens to the ownership of the LLC when a member dies? First, let’s define some important terms: Probate occurs when someone dies, and their assets are distributed to pay their liabilities and beneficiaries. Stated another way, probate is a court-led, legal process that begins after someone passes away. The court will distribute their estate to the proper heirs. An executor is someone assigned to follow the deceased...
Nonprofit Corporation vs. 501(c)(3)
People often use the terms “nonprofit corporation” and “501(c)(3)” synonymously. However, they don’t necessarily mean the same thing, and it’s important to know the distinction if you plan to operate as a nonprofit organization. A Nonprofit Corporation is a state-registered business entity that exists for the public good or a charitable cause instead of the goal of generating profits and providing financial gains for its shareholders. Nonprofit Corporations do not have owners (shareholders), nor do they issue stock or pay dividends to individuals or other business entities. Registering as...
What Happens if You Fail to Submit Your Annual Report?
Nearly every U.S. state requires Limited Liability Companies, C Corporations, and other registered business entities to complete and file some form of an Annual Report. Annual Reports are intended to keep state officials up to date with contact information for your business and inform them of any important activities, such as the addition of directors or members or a change of your registered agent. Some states also require information about earnings and assets. The requirements for Annual Reports are specific to the state of formation. For example: The Annual Report may be called...
FinCEN Won’t Enforce BOI Reporting Fines or Penalties Until Further Notice
In a press release on February 27, 2025, FinCEN said that it “will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines.” By Friday, March 21, 2025 (which is the current deadline for many reporting companies), FinCEN plans to issue an interim final rule to extend BOI reporting deadlines. The U.S. Treasury bureau will not fine or penalize anyone for not complying with BOI reporting requirements...
What Is a Pass-Through Entity?
A pass-through entity refers to a business that does not pay income tax of its own. Its income, losses, credits, and deductions “pass-through” to each business owner’s personal tax return, where its profits are taxed according to each owner’s individual income tax rate. Sole proprietorships, general partnerships, limited partnerships, limited liability partnerships, limited liability companies, and S Corporations are all pass-through entities. Corporations, and limited liability companies that elect to be taxed as a corporation, are not pass-through entities.
Beneficial Ownership Reporting Requirements Are Back In Effect
After a temporary halt in the requirement to submit beneficial ownership information reports (BOIR) to the federal government, FinCEN has announced that the reporting obligations under the Corporate Transparency Act (CTA) are again mandatory. What Does This Mean for Business Owners? On February 18, 2025, the U.S. District Court for the Eastern District of Texas ruled to reinstate the BOIR requirement. In response, FinCEN has set a March 21, 2025, deadline for most companies to file their initial BOIR if they haven’t already done so. Likewise, existing reporting companies with changes in...
Company Applicant vs. Beneficial Owner
The Corporate Transparency Act’s Beneficial Ownership Information Reporting Rule went into effect in January 2024, leaving many business owners wondering: Are they required to submit a Beneficial Ownership Information (BOI) Report? What’s the difference between beneficial owners and company applicants, and what information does a reporting company have to share about them? Although certain entities are exempt, most small Corporations, Limited Liability Companies (LLCs), Limited Partnerships (LPs), Limited Liability Partnerships (LLPs), Limited Liability Limited Partnerships (LLLPs), and...
BOI Reporting Requirements By Business Entity Type
As the deadline approaches for reporting companies to submit their BOI report to FinCEN, many business owners are still questioning if they need to file a report. I field that sort of inquiry a lot when presenting webinars on the topic and the answer is often related to the type of business entity utilized by the business. If you're new to the subject of BOI reporting, you can reference one of my earlier articles to come up to seep quickly: How the Corporate Transparency Act Affects Your Company What Is a BOI Report and Do You Need to File One Company Applicant vs. Beneficial Owner Do...
Should You File a BOI Report Amid the CTA’s Questionable Constitutionality?
You’ve likely heard buzz about the U.S. District Court for the Northern District of Alabama’s March 1, 2024, ruling that the Corporate Transparency Act (CTA) is unconstitutional because it oversteps Congress’s legislative authority. As a result, plaintiffs in the National Small Business United (NSBU) et al. v. Yellen case may pass (for now) on filing Beneficial Ownership Information (BOI) reports to the Financial Crimes Enforcement Network (FinCEN). My team at CorpNet has talked with many concerned and confused business owners. They want to know if this means they don’t have to file a BOI...
Consequences of Not Filing a BOI Report
By now, you’ve hopefully heard about the beneficial ownership information report that many businesses must file before the year's end. The BOI report is filed with the Financial Crimes Enforcement Network (FinCEN) and it is designed to document information about the owners of companies within the USA. Businesses that are required to file BOI reports are called reporting companies and they meet certain reporting due dates depending on when they were created or registered. Reporting companies that do not file a BOI report by their due date are subject to severe civil and criminal penalties,...
BOI Filing Requirements: What Is Needed?
Companies required to file a Beneficial Ownership Information report (ROIR) under the Corporate Transparency Act must share information with FinCEN about their reporting company, beneficial owners, and company applicants. If you're filing the BOI report yourself, the process can feel a little confusing. As you progress through the form fields, you can't help but notice you are inputting the same data over and over again. In reality, you are, but the reason for this is you are answering questions on various parties involved and information can overlap. What details must be included in the...
What Is a BOI Report and Do You Need to File One?
Did you know many businesses had a new federal reporting requirement in 2024? Most registered business entities — like Limited Liability Companies (LLCs) and Corporations — must file a beneficial ownership information report (BOIR) with the Financial Crimes Enforcement Network (FinCEN). In September 2022, FinCEN, a bureau of the U.S. Department of Treasury, announced its final rule requiring certain entities to report their beneficial ownership information. The BOI report is designed to provide transparency about who owns and benefits from an LLC or Corporation. It requests identifying...
The Purpose of BOI Reporting
Why does FinCEN need a BOI report? Could the purpose of BOI reporting be so great that businesses across the USA have to file yet another report with the government? That’s the question many business owners have been asking since the Corporate Transparency Act of 2021 enacted the Beneficial Ownership Information Reporting Rule, which went into effect in January 2024. The purpose of the BOI report is to inform the federal government about the real people who ultimately own or control businesses. The greater purpose of the BOI report is to help identify and safeguard against: Tax evasion...
Is the Beneficial Owner Information Report a One-Time or Recurring Filing?
Reporting companies must file a Beneficial Ownership Information report with the Financial Crimes Enforcement Network (FinCEN). The BOI report is considered a one-time filing. If a business entity’s initial BOI report is accurate and no information filed in the report changes, the company does not have to submit any subsequent reports. When Is an Initial BOI Report Due? Current BOI reporting dates include: For the vast majority of reporting companies, the new deadline to file an initial, updated, and/ or corrected BOI report is now March 21, 2025. FinCEN will provide an update before then...
12 Examples of Sole Proprietorships
A large range of businesses operate as Sole Proprietorships – a type of business entity that has one person, or a married couple, as its owner and operator. In fact, there are more Sole Proprietorships in the United States than any other type of business structure, including Limited Liability Companies (LLCs) or C Corporations. Sole Proprietorships are popular because they’re easy and inexpensive to get started. If someone hires you to bake their wedding cake, tend to their landscaping, or tutor their child in math, you’ve, by default, established a Sole Proprietorship. There’s no need to...
How to Start Your Own Business
The U.S. Chamber of Commerce reports that more than 5.5 million new business applications were filed in the United States in 2023. This record number has continued to grow since the surged started in 2020. If you’re one of the millions of Americans with a dream of starting your own business, I’m happy you to say you're in good company. As someone who has formed a number of small businesses, I’d like to provide some advice and walk you through the steps of getting started. Opening your own company, whether it’s a Sole Proprietorship, Partnership, Limited Liability Company (LLC), or C...
Is a Multi-Member LLC Right For You?
Are you starting a business with some colleagues or friends? Or do you have an existing business and want to add some partners so you can grow your company? In either case, the multi-member LLC business structure may be a good option to consider. A multi-member LLC is a Limited Liability Company with more than one owner. It is a separate legal entity from its owners (a.k.a. members), while by default, income tax obligations are on a pass-through basis to the LLC’s members (similar to Partnership). Let’s take a closer look at why many companies with multiple owners choose the entity type....
Does an S Corporation Need to File Articles of Organization?
If you’ve spent any time on this blog or researching how to incorporate your business online, you’ve probably found some terms that were a bit confusing. What’s the difference between an LLC and a C Corporation? What paperwork do I need to file annually? What are Articles of Organization, and do I need them? Bringing S Corporation elections into the discussion only creates more confusion. Let’s address that last question and talk about filing Articles of Organization for S Corporations. While the Limited Liability Company (LLC) and C Corporation are different, they both provide similar...
Forming a Sole Proprietorship
If you’re looking to start your own business, a Sole Proprietorship is an easy way to get started. A Sole Proprietorship is a simple business entity in which one person, or a married couple, acts as the sole owner and operator. Unlike a C Corporation or Limited Liability Company (LLC), you don’t have to register a Sole Proprietorship with the state or file an annual report and pay a fee each year to maintain good standing. Basically, you can form a Sole Proprietorship simply by having someone hire you to provide a product or service. By doing so without registering your business with your...
Business License vs. Permit
You might hear the terms “business license” and “business permit” used interchangeably. Although they are similar in that a company may need them to conduct business in a particular area, they aren’t exactly the same. Business licenses and permits help ensure that companies operate lawfully and safely. Generally speaking, a business license gives a company the legal authority to operate a business in a specified area while a permit provides permission (typically based on meeting certain safety requirements) to carry out specific activities at a location. Operating without the appropriate...
When Do You Need to Start Paying Sales Tax on Online Sales?
Understanding sales tax responsibilities can be confusing. For businesses with a brick-and-mortar storefront, it’s relatively straightforward. However, the rules get hazy when selling online to customers in other states. Let's review what you need to know about what online sales you need to tax and when you need to do so. What You Need to Know About In-State Sales Tax Before I get into details about selling online, here’s a quick overview of how sales tax works in-state. In simple terms, sales tax is a tax imposed by the state (and/or county or city) on taxable goods or services sold in...
Business Filings for Growing Your Company
Are you aspiring to elevate your business to the next level? Are you expanding your products and services, bringing in new partners, entering into new markets, or adding employees? You might want to complete some important business filings before you take those next steps. Depending on your circumstances and growth strategy, some filings may be optional, while others could be legally required. In this article, I’ll identify some filings commonly associated with growing a business. Incorporation As businesses grow, often so do their liability risks. So, if you’re operating a Sole...
How to Change Your LLC Address
If your Limited Liability Company (LLC) has outgrown its space or you’ve been operating from your home and are ready to move the business to another location, you’ll need to notify certain parties of your address change and update your operating agreement. Changing your business address doesn’t sound like a big deal, but not doing so correctly could make it a big deal in terms of consequences. Tax and licensing agencies need to keep track of where businesses are operating and don’t look kindly on those that fail to report address changes. In fact, not reporting a change of address could...
The Advantages and Disadvantages of a Subchapter S Corporation
Before the advent of the S Corporation in 1958, entrepreneurs had two options for forming a business entity. They could form a Partnership or a C Corporation, but neither of those business structures fulfilled the needs of many people seeking to start their own businesses. To help encourage small businesses in America, Congress and President Eisenhower created the Subchapter S Corporation. Whether you're a business owner or a professional service provider that gives entrepreneurs legal or tax advice, you'll want to understand what a Subchapter S Corporation is and who can benefit from it....
S Corporation Election Considerations for Corporations and LLCs
Have you been thinking about whether your business might benefit from being an S Corporation? I presented a webinar for accounting professionals about the S Corporation election not too long ago. Within that presentation, I covered information of value to entrepreneurs in all fields. In this article, I will share that insight with you in hopes that it will help you gain a deeper understanding of what it means to be an S Corporation. What Is an S Corporation? The S Corporation is not a business structure in itself. Rather, it is a special federal income tax election option for eligible...
How to Start a Daycare Business
Daycare businesses provide a critical service to working families. Parents and guardians need reliable, responsible childcare services to ensure that their children are well taken care of while adults in the household work hard to earn a living. Before starting a daycare, I recommend that you seek resources—such as an attorney, tax advisor, accountant, and business consultant—who can help with your legal, accounting, and industry-specific questions and decisions. In the meantime, I've created this step-by-step guide that provides key considerations and action steps for starting your own...
State of Colorado Periodic Report
All Corporations, Limited Liability Companies (LLCs), Non-Profit Corporations, and foreign entities registered to conduct business in the State of Colorado must file a periodic report each year with the Colorado Secretary of State’s Business Division. The intent of the report, which in some states is called an annual report, is to make sure the state and members of the public have the most up-to-date information about every reporting company that conducts business in Colorado. Filing the report is not difficult, but you must pay close attention to guidelines, as not doing so could result...
