The Launch Blog: Expert Advice from the CorpNet Team
The Bookkeeper’s Guide to Outsourcing
How many of your bookkeeping clients are business owners outsourcing their accounting tasks to you? If you’re lucky, probably quite a few, since small and large businesses alike have plenty of complicated financial needs. Smart business owners know that outsourcing tasks not in their wheelhouse are a great way to free up valuable time that can be better used to grow their businesses. Just as with your clients, wearing all the hats in your bookkeeping business is not the best use of your skills. When does hiring an expert help make more sense for your needs and your bottom line? Here are...
A State-by-State Guide to Economic Nexus
Economic Nexus The Supreme Court ruling on the South Dakota v. Wayfair case in 2018 changed how out-of-state retailers collect and remit sales taxes in each state. At a minimum, states can mandate that businesses without a physical presence in a state and with more than 200 transactions or $100,000 in-state sales can be required to collect and remit sales taxes to the state where the goods are purchased. Because sales tax regulations vary by state, each state has its own rules, registration process, and tax rate for out-of-state retailers that reach economic nexus in that state. In most...
Can You Have Multiple EIN Numbers?
Just as a Social Security Number identifies an individual taxpayer, an Employer Identification Number (also known as an EIN, Federal Tax ID Number, or FTIN) is a nine-digit number that identifies a business entity. In addition to the IRS and other tax authorities using EINs to track payments, reports, and other filings, other government agencies, financial institutions, and even vendors may ask for a company’s EIN when opening accounts, approving loans, or engaging in transactions with the business. While a business entity can have only one EIN, a business owner can request more than one...
How to Start a Business in the USA as a Foreigner
The United States of America holds 13.5% of the global GDP and is only second to China in its share of global revenue. This statistic, along with its strong economy, makes the United States an ideal location for foreigners to start a business and capture that elusive "American dream" pushed so hard by the media and social media. It’s no wonder many foreign entrepreneurs dream about starting a business in the USA. But the strong economy and market demand are not the only advantages the United States offers. Nonresidents who form a U.S. business can capture this market while also taking...
What Happens If You Accidentally Miss a Tax Deadline?
In this article, I’ll discuss the potential consequences for professional tax services providers and their clients (taxpayers) when tasks get forgotten and tax deadlines have been missed. I’ll also touch on options for resolving late filing and payment issues with government agencies.
A State-by-State Guide to Seller’s Permits
If your business plans to sell products or services, most states will require you to obtain a seller’s permit. This seller's permit can also be called a sales tax license or sales and use tax permit. The process and fees for obtaining a seller’s permit vary by state, as do the rules for remote sellers. States that require a seller’s permit or sales tax license will require businesses to collect sales tax on products and services sold to customers living in their states. This tax will then be reported and remitted to the state on a predefined schedule. Failure to collect and remit sales...
What You Need to Know About Collecting Sales Tax
Before a retailer or service provider can open for business, they first must get approval from the state for sales tax registration. Not all states charge sales tax, and not all products and services are taxable, so it’s essential to learn the facts before you find yourself in compliance hot water. Here’s what to know about your business’s responsibilities regarding the collection of sales taxes. Sales Tax Vary by State and Sometimes by County Currently, forty-five states and the District of Columbia collect statewide sales taxes, while five states do not have a statewide sales tax. The...
What Is a Fictitious Name?
What Is a fictitious name? A fictitious name is a name other than your proper legal business entity name that you formally get permission from the state (or county) to use when conducting business. You may also see a fictitious business name referred to as: Doing Business As (DBA) Assumed name Trade name Throughout this post, I will use the terms “fictitious name” and “DBA” interchangeably. At CorpNet, we help business owners throughout the United States file DBAs. Fictitious names can benefit businesses of all types—from sole proprietorships to LLCs to corporations. At CorpNet, we help...
What Is a Letter of Good Standing?
Professionals like you, who help entrepreneurs navigate the challenges of starting and growing their businesses, will likely encounter clients asking about a "Letter of Good Standing." Let's take a moment to talk about what a Letter of Good Standing is and why maintaining a status of good standing is so important. A Letter of Good Standing refers to a certificate issued by a state's Secretary of State office (or comparable agency). It verifies that a registered business (e.g., an LLC or corporation) has complied with all of the state's rules for conducting business in that state. "Good...
How to Start an Accounting Business
Whether you’re a finance major fresh out of college or have been working in an accounting firm or department for years, I’ll bet you’ve thought about being your own boss. There’s a lot to consider when exploring how to start an accounting business. Let's dig into the necessary steps and mistakes to avoid. Starting an accounting business offers an opportunity to chart your own professional course and enjoy the flexibility and control of self-employment. Of course, there's plenty of research and work involved in the process. You'll want to be thorough and well-informed as you make decisions...
Can an S Corporation Use LLC or Inc in Its Business Name?
If you are considering electing S Corporation status you might wonder how this will impact your existing LLC or C Corporation. One question that comes to mind quickly is the continued ability to use LLC or Inc with a business name. S Corporation election is a tax classification, it does not change a business’s legal structure. Limited Liability Companies and C Corporations that elect S Corp status remain the same underlying business entity and retain their legal business name. Therefore, a Limited Liability Company may use "LLC" (or another limited liability company designator allowed by...
How to Legally Change a Business’s Name
Despite your best efforts to choose the perfect name for your company, there may come a time when that name no longer is the best fit. Perhaps the business name no longer accurately reflects your brand or there are legal considerations at play. Regardless of the reasons to make a business name change, it’s a process that many entrepreneurs find confusing. The steps involved can vary depending on the business entity type and state of registration. You may not expect ever to have to change your company name but knowing what to expect will help alleviate some of the stress if ever you do...
Should I Incorporate or Form an LLC for My MLM Business?
Also sometimes called network marketing companies, a multilevel marketing company (MLM), offers income opportunities to folks who want to set their own schedule and work at their own pace—without having to build a business from the ground up. Many people who want the flexibility of being their own boss have chosen careers working as agents for MLM companies, so I regularly field questions from these entrepreneurs about what legal structure will be optimal. MLM entrepreneurs are considered independent contractors. Sometimes they are also referred to as independent consultants, independent...
Choosing the Best State to Start a Business
Choosing the best state to start a business is an important detail in your overall business plan. When it comes to launching a small business, “Location, location, location” is part of the formula for success. If you’re wondering if a specific location would give your startup an extra advantage over the competition, you should check out WalletHub’s latest report on 2022’s Best & Worst States to Start a Business. With a bad location ranked as one of the top reasons for business failure, choosing where to launch your business can be almost as important as choosing what business to...
Do Amazon Sellers Need an LLC?
Amazon sellers, like other entrepreneurs that sell products online, should think about how their business structure affects them professionally and personally. The business entity type chosen has an impact on income tax obligations, ongoing business compliance requirements, and the financial and legal liability of the business owner. So, you’re asking a valid question if you’re wondering if Amazon sellers need an LLC or is a Sole Proprietorship or no entity at all is sufficient. While it doesn’t appear that Amazon requires sellers to form their businesses as any particular business entity...
How to Apply for an EIN
One of the essential steps new business owners must take when launching their companies is to apply for an EIN. An Employee Identification Number (also known as a Federal Tax ID Number or Tax ID Number) is a nine-digit number assigned to a business for filing taxes, submitting reports to the state, applying for business licenses and permits, and completing other documentation. Similar to how a social security number serves as identification for an individual, an EIN serves to identify a business. The IRS issues EINs at no charge. Is an EIN Necessary? The IRS identifies the specific...
Can an S Corporation Own an LLC?
When entrepreneurs want to expand their businesses, they face the important decision of how to structure that growth. One approach is to form a separate company under another registered business entity. Some restrictions exist and small business owners may be wondering if an S Corporation can own an LLC (Limited Liability Company). The answer is yes and in today's article, I’ll shed some light on what S Corporation ownership of an LLC means and how an S Corporation may benefit from being a member of an LLC. What is an LLC? A Limited Liability Company is a business entity that provides...
What Is 501(c)(3) Status and How Do You Obtain It?
Have you always dreamed of starting a nonprofit organization so you can give back to your community? Maybe you have a charity that’s close to your heart, such as research for autism or helping the homeless, and you’ve always wanted to have the same kind of impact through your own nonprofit. Whatever your vision, making your nonprofit organization a success starts the same way as any other business—by staying in compliance with government regulations. Your nonprofit organization is accountable to state and federal agencies, including the IRS, which is where 501(c)(3) (also referred to as a...
How to Budget as a Freelancer
Creating a budget as a freelancer shouldn’t be any harder than it is for any other small business. And yet, the rollercoaster ride of finding and keeping clients, collecting invoices, marketing your business, and juggling all of this yourself can create major budgeting headaches. Income predictability is a challenge unique to freelancers. Fortunately, there are many simple steps you can take better learn how to budget as a freelancer. Keep Business and Personal Finances Separate Even if you used personal assets to start your freelance business, it’s important to create a clear boundary...
Ten Tips for Creating a Business Name
Creating a business name is one of the most exciting and important startup tasks that entrepreneurs must tackle. The name you choose for your business will serve to distinguish you from your competitors and give customers insight into the experience they will have with your company. You will want to get it right and follow the necessary steps to ensure you have legal rights to use your name before you start publishing it on all of your documentation and marketing materials. 1. Consider the Personality You Want to Project How do you want people to perceive your company? Hip? Luxurious?...
Do I Need Articles of Organization For a Michigan LLC?
If you're considering forming a Limited Liability Company (LLC) in Michigan, you're probably wondering what paperwork the state requires. For example, do you need Articles of Organization for a Michigan LLC? That's one of the common questions we field here at CorpNet—for Michigan and the other 49 states in the U.S. The answer is yes. In the state of Michigan, an LLC must file an Articles of Organization form with the Corporations, Securities & Commercial Licensing Bureau of the Michigan Department of Licensing and Regulatory Affairs. The Bureau will then assign your business a...
Can a Sole Proprietor Have Employees?
Even when a small business starts as a sole proprietorship with only a solitary business owner who handles everything, growth and expansion are often the ultimate objectives. To achieve those goals, a sole proprietor will likely need some help along the way — which may involve hiring workers. Since a sole proprietorship is not an officially registered business entity nor recognized as its own tax entity, you may be wondering if a sole proprietor can have employees. The answer is yes! Let's explore this further and answer some common requestions that relate to this topic. 1. What is a sole...
How to Register a Business in Oregon
Have you been thinking about making your dream of starting your own business in the beautiful Pacific Northwest a reality but not sure how to begin? This post will help guide you through the process of registering a business in Oregon. That said, let’s get started exploring the steps needed for registering a business in Oregon. 1. Decide on a Business Name Before you submit the necessary forms to register your business, you will need to choose a name for your business. Then you’ll need to check to see if the name is available and meets Oregon’s rules and regulations. Do an Oregon...
What Are Payroll Deductions?
Payroll deductions are monies that employers withhold from an employee’s pay. These deductions include withdrawals such as federal income taxes, state income taxes, local income taxes, FICA tax (Social Security and Medicare taxes), medical benefits, retirement savings plans, or wage garnishments. Some employee pay deductions are mandatory withdrawals such as income taxes, Social Security and Medicare taxes, and court-ordered child support payments. Others are voluntary deductions that the employee has authorized (via written permission) to be taken out of their compensation. Examples of...
What Every Small Business Should Know About 1099s
Every year when tax time rolls around, many business owners wonder whether they must send 1099s to their vendors. As commonly known as 1099 forms are, they remain one of the most misunderstood Internal Revenue Service (IRS) requirements. Recently, more confusion has surfaced as the IRS changed the type of 1099 form used for reporting nonemployee compensation to vendors. To help entrepreneurs understand the circumstances under which the IRS requires issuing 1099 forms, I will provide some basic “must-know” information here. I encourage business owners to speak with their accountant or...
How Much Does it Cost to Incorporate Your Business?
So you’ve decided to register your business as a Limited Liability Company or C Corporation. Kudos to you for thinking about the benefits of liability protection and possible tax advantages that come with formally establishing your company as a separate legal entity. Like many small business owners, you may now be wondering how much it will cost to incorporate your business and in what state should register your company. Some entrepreneurs opt to register their Limited Liability Company (LLC) or C Corporation within the state they live in. Others look around for a state with the most...
Breaking Down Business Entity Types
One of the most important steps you’ll need to make when starting your business is reviewing business entity types and deciding which one you should choose for your company. The structure you pick will affect your business from legal and tax obligation standpoints. That’s why it pays to understand the various business entity types—and the potential advantages and downsides of each. I recommend talking with a business attorney and accounting professional for guidance. In the meantime, I’m going to share some information about the most commonly used business structures to give you a head...
Is A Real Estate LLC Really Necessary?
A Real Estate LLC (Limited Liability Company) business structure has become a preferred entity of real estate investors for holding title to investment properties. That’s not too surprising considering the advantages of forming an LLC: It limits personal liability. It provides tax treatment flexibility. It’s relatively simple to establish and maintain. It’s less costly to set up and maintain. It offers more flexibility in how you distribute profits. It makes it easier to pass real estate investments to your loved ones. An individual or a company beyond the United States can own it. Let’s...
How to Choose and Legally Use Your Business Name
The name you choose for your business will be one of your most powerful and valuable assets. As one of the primary ways customers distinguish you from your competitors, your business name wields a lot of power. The right name can help propel you to success; the wrong name can put you at a disadvantage. Besides choosing a business name that: Projects how you want people to view your business (e.g., edgy, professional, high-tech, academic, approachable, etc.) Make it easy for customers to identify what you do. Is also simple enough to be memorable. I encourage you to have all your legal I’s...
Will Your Business Need Financing in the New Year?
As you plan and set goals for your small business in 2023, one area to look at is financing. Will you need additional funding at some point in the New Year? If the answer is yes, how will you raise the money? Take a closer look at the two primary means of raising capital — equity financing and debt financing — and what you need to know about each. Equity Financing In equity financing, you give up a piece of your business (equity) in return for an investment of capital. Equity investors may be private investors, venture capital companies, or even your friends and family. Angel investors...
