The Launch Blog: Expert Advice from the CorpNet Team

Legislative Update Gives Exemption to New California Limited Liability Companies LLCs registered to do business in California must pay an annual franchise tax of $800 to the state's Franchise Tax Board (FTB). However, to relieve some of the financial pressures amid the pandemic for newly formed businesses, California Governor Gavin Newsome signed legislation in 2020 to exempt startups from paying the LLC franchise tax during their first year in business. This is welcome news for aspiring business owners in the Golden State! The new rules established by the state’s 2020 Budget Act (AB 85) [...]

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 Corp 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, [...]

IRS Form 2553 (Election by a Small Business Corporation) is the form that a corporation (or other entity eligible to be treated as a corporation) files to be treated as an S corporation for federal tax purposes. The IRS has specific criteria that entities must meet to qualify for S Corporation election. Here’s an overview of their requirements: Must be a domestic corporation or a domestic entity eligible to elect to be treated as a corporation Must timely file Form 2553 Must have no more than 100 shareholders (or LLC members). Shareholders are individuals, [...]

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 [...]

A corporate resolution is a formal record of a corporation's board of directors' decisions and actions on behalf of the company. States require incorporated companies to use corporate resolutions for recording major business decisions. The company's board of directors must vote to approve resolutions either during board meetings or in writing. 

It may be hard to believe, but tax season will soon be here again. A lot has changed, tax-wise, in the past year due to new coronavirus-related legislation. Here’s a quick look at what business owners need to know about filing their taxes in 2021 and how to make sense of the latest pandemic-related tax incentives. Sole Proprietorship A sole proprietor does not have any legal separation from their business’s property and liability. Therefore they file a Schedule C (IRS Form 1040) “Profit or Loss From Business,” and it’s considered personal income. The deadline [...]

March 15, 2021 is the deadline for electing S Corporation tax status for your Limited Liability Company (LLC) or C Corporation. There are a lot of tax advantages that come with the S Corp election, so this date should be on your radar. Let's explore what the S Corp election is, why you would want it, and how you can request it. S Corporation Election Deadline For the S Corp election to be valid for 2021, existing LLCs and C Corporations (with a tax year that began on January 1) will need to file [...]

Owning investment properties can be exciting and lucrative. However, investments in real estate, whether vacation rentals, long-term rentals, or properties for resale, can also create liabilities. That's why it's critical for real estate investors to wisely choose how they will structure their businesses. For example, a renter might trip on an unstable staircase. A guest could slip on an uneven sidewalk. Faulty electrical wiring could shock a tenant or cause a fire. Or a slow leak in a building's plumbing might cause mold that affects a tenant's health. Accidents happen and they can potentially [...]

Whether you sell products or services in one state or many states, it’s imperative to understand your business’s sales tax compliance requirements. To correctly register a business in a state and then file and the proper sales tax, you need to know the difference between sales tax and sellers use tax and how nexus affects your obligations. Sales Tax Sales tax is a “transaction” tax paid by a consumer for a product or service and is a percentage of the sales price. Although not all states charge a sales tax, it is the seller’s [...]