The Launch Blog
The CorpNet blog offers expert advice for launching and operating your business. From start up information to ongoing compliance, the CorpNet team keeps you up to date!
Tax Benefits of Incorporating
Tax implications are among the most important factors to think about when deciding on a business entity type. Some business owners are attracted to the simplicity of pass-through taxation, which is how a Sole Proprietorship, Ppartnership, LLC, and S Corporation are taxed. But for others, the tax benefits of incorporating as a C Corporation offer more financial advantages. A C Corporation is a business entity independent (both legally and from a tax perspective) of its owners (called shareholders). As such, the company is responsible for reporting its profits and losses on its own income...
Can Your LLC Have the Same Name as One in a Different State?
The name you choose for your Limited Liability Company (LLC) is important, as it conveys a first impression to potential customers and serves as the cornerstone of your brand identity. When selecting a business name it is important to remember that no two businesses registered within a state can share the same name. When considering a name for your LLC, you’ll need to conduct a search through the Secretary of State’s office to make sure another business in the state is not already using it. If it’s in use, you’ll need to choose another name. Laws regarding duplicate names of businesses...
What Is IRS Form 8832?
IRS Form 8832 (Entity Classification Election) is the form an eligible business entity uses to elect federal income tax treatment other than its default treatment. Eligible entities include: Limited Liability Companies (LLCs) Partnerships (a business entity that has at least two members and is not a corporation) According to the IRS, a corporation is usually not considered an eligible entity unless: It is an eligible entity that previously submitted Form 8832 to be an association taxable as a corporation. The IRS may then allow it to use Form 8832 to change its classification. It is an...
How to Start a Restaurant Business
Are you thinking about how to start a restaurant business? Without a doubt, it's an industry that contributes immensely to our economy. According to statistics from the National Restaurant Association, there are over one million restaurant locations in the United States, and they collectively employ 15.6 million people. What I think is especially encouraging about the restaurant industry is that it has a track record of opening the door to entrepreneurship to people with humble beginnings who are willing to work hard and learn. Many people who start a restaurant begin by working in the...
Can a Minor Own an LLC?
There are stories all over the internet about kids and teenagers who have started businesses and are operating successfully as entrepreneurs. Sisters Caroline and Isabel Bercaw started making bath bombs in their basement in Minneapolis when they were 11 and 12 years old, eventually growing the highly successful business – Da Bomb – into a small empire. R.J. Duarte started cutting grass in Golden, Colorado when he was 8 and built a flourishing, high-end landscaping service by the time he was 18. And then there’s Cory Nieves, who started baking cookies as a young child and turned his...
What is a DBA?
A DBA - or Doing Business As is a name different from a company's legal name. It is also referred to as a trade name, assumed business name, or a fictitious business name. Typically, businesses use a DBA name when they want to market their products or services under a company name that’s more memorable or distinctive than their entity’s legal name. DBA laws requiring companies to register fictitious names are consumer protection regulations that provide transparency. They let the public know who is operating a business. DBA filings put information about the person or company who owns a...
The Best States to Form a Foreign LLC
While most entrepreneurs choose to register a Limited Liability Company (LLC) in the state where they live and plan to operate, some decide to expand their operations into one or more other states by registering it as a “foreign LLC”. The LLC is considered a “domestic LLC” in the state where it filed its entity formation paperwork (called Articles of Organization in most states). When an entrepreneur wants to expand their company beyond the borders of the state where they filed its formation paperwork, they may want (or be required) to register it as a foreign LLC in other states. The...
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...
How to Create an LLC
A lot of new small business owners assume that creating an LLC is a complicated thing. It’s not, actually. But it is one of the best things you can do to protect your personal assets and your business. Let’s take a look at what it takes to set your business up as a Limited Liability Company: Choose a name - Your name will be the first thing people see or hear as it relates to your new business, so make it a good one (here you can find tips on coming up with a memorable name). Next, you want to make sure you’re the only one using that name. You can do that with a free corporate name search...
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...
