The Launch Blog: Expert Advice from the CorpNet Team

What is a Certificate of Registration?

If you’re an accountant, attorney, or in the business of otherwise professionally advising entrepreneurs, you may have had clients inquire about what they need to do to expand their companies into other states. One of the most important steps involved in the process is to file a Certificate of Registration in the additional states where LLC or corporation wishes to conduct business. You may have heard it called by other names, such as foreign qualifying or filing a Certificate of Authority. Filing a Certificate of Registration means that the LLC or corporation wants to operate as a...

Multiple State License Plates

How to Legally Start an eCommerce Business

If you have been considering starting an eCommerce business, you’re exploring an industry with a promising outlook. The last few years have forced many people to buy products online and this new way of shopping isn't going away anytime soon. In today's article, we'll review the primary eCommerce considerations you'll need to think about and then we'll walk through the general legal steps for how to start an eCommerce business. Top Questions for Starting an Online Business As you work through the issues that I've shared below, I encourage you to research the industry you're interested in...

Woman Shipping Product for Online Store

The Right Way to Terminate a Partnership Agreement

There are many reasons why you'd want to terminate a partnership agreement. The goals of one or both partners have changed, your working styles are incompatible, or there are fundamental disagreements about business operations and decisions. Whatever the reason, the partners must understand and follow the correct procedures and regulations for partnership termination, so all parties are legally separated from liability. What is a Partnership? A partnership is a legal entity where two (or more) people own and operate a business, and each partner owns a percentage of the assets and...

Shredding a Contract

LLC’s: Best Biz Structure to House Multiple Properties

With any property, there are inherent liabilities — from a broken balcony railing to old electrical wiring or mold. The LLC forms a wall that shields individual owners from personal liability. If sued by a tenant or guest, the defendant is the LLC, not you. And the judgment can be collected only from the LLC's assets, and not from your own personal assets.

Mini Houses on Stacks of Coins

California LLC Franchise Tax Waived in First Year

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)...

FTP Logo Overlaid on Stack of Money

Do You Need an LLC for Rental Property in Another State?

No matter where you’re buying a rental property, protecting that investment is important. Many real estate investors who own rentals choose to set up each of their properties as a Limited Liability Company (LLC). Doing so helps protect their personal assets from mishaps or accidents at their rental locations. But do you really need an LLC for rental property in another state? And, where is it most advantageous to register an LLC when buying real estate property out of state? Is it in the investor’s home state or where the rental property resides? In this article, I’ll provide some food...

For Rent Sign in Front of House

Hiring Family Members in a Small Business

I'm often asked if it is advantageous for a small business to hire family members. Some entrepreneurs have asked if hiring relatives presents legal issues, while others have asked if it is ethical. Whether you believe this practice is good business or nepotism, there are a lot of companies hiring relatives in full-time and contract positions. In the U.S. today, there are 5.5 million family-owned businesses, employing 63% of the American workforce. That adds up to many family business owners working with family members. These scenarios could be fraught with angst or, if done right, lead to...

Father and Daughter Working in Bakery

The CPA’s Guide to Assisting Clients with Business Compliance Issues

As a CPA, you probably sometimes find that clients inquire about more than just their business’s taxes and finances. With the strong connection between their money and all aspects of their companies, they may toss you questions about a variety of business compliance issues that aren’t in your normal area of focus. You need to exercise caution in responding because your insight shouldn’t take the place of proper legal counsel or human resources guidance. But having a working knowledge of diverse compliance topics can help you aid your client’s understanding of certain issues and steer them...

Accountant Advising Clients

Who Are the Officers of a Corporation?

A corporation has three main categories of stakeholders involved in the financial and management aspects of the company. While all play a crucial role, officers work more closely with a corporation’s managers and supervisors, arguably having a more direct impact on the company’s success. Officers - Officers are individuals appointed by the board of directors to manage the corporation. They act as agents of the board to ensure the organization carries out the directors’ decisions. Corporate officers’ roles and the number of officers can vary based on state law and the company’s governance...

Meeting of Corporate Officers

What is a Certificate of Incorporation?

When forming a C Corporation, business owners need to file for a Certificate of Incorporation (sometimes referred to as Articles of Incorporation) to register their company with the state. What is a Certificate of Incorporation exactly? It is a legal document serving as a formal record of a company’s formation. Who Needs to Submit a Certificate of Incorporation? Entrepreneurs who want to operate their company as a corporation must file a Certificate of Incorporation form. They must have their Certificate of Incorporation approved by the state (usually the Secretary of State Office) before...

Man Stamping a Legal Document

DBA vs. LLC: What’s the Difference?

If you’re starting a new business or adding new locations or business lines to an existing one, you are likely wondering if registering a DBA (doing business as) or forming an LLC (limited liability company) is the best route to travel. A DBA is an assumed (fictitious) name that an existing business has received approval to use when conducting business. An LLC is its own registered business entity. Both options provide a way to operate under a business name other than a company’s legal name. But in addition to that similarity, they have significant differences. Choosing one or the other...

Cartoon Man Comparing Positive and Negative

What Is a Reseller License?

If you’re starting a retail business (whether online or at a brick and mortar location), you’ll want to apply for a reseller license. A reseller license certifies you don’t have to pay sales tax when buying products on a wholesale basis for the purpose of reselling them to customers. In some states, a reseller license might alternately be called a reseller permit, resale license, resale certificate, sales tax permit, or some other term. Regardless of its name, its purpose is to identify your company as a reseller. Reseller License and Sales Tax In the United States, a business with a...

Cartoon Street of Businesses

How Do You Pay Yourself as a Sole Proprietor?

Many small business owners start their companies as Sole Proprietorships. The Sole Proprietorship business structure offers setup simplicity, cost-effectiveness, and minimal business compliance requirements. As with any form of business, entrepreneurs must consider the pros, cons, and additional nuances such as paying themselves. Before deciding to operate as a Sole Proprietorship or any other business entity, it’s critical to understand how your choice will impact you. What Is a Sole Proprietorship? The IRS defines a Sole Proprietor as "someone who owns an unincorporated business by...

Man Holding a Paycheck

Is a Farm LLC Really Necessary?

Starting and running a farming business provides the opportunity and the freedom to forge your own professional path. There’s hard work involved and any seasoned farmer will tell you farming is a 24/7 commitment. And an agricultural business comes with many of the same risks that other types of companies do, and some that other types of businesses do not. A farming business faces many uncontrollable threats such as economic downturns, droughts, floods, illness, accidents related to the use of large equipment, or unseasonable freezing weather. That’s why it’s critical to consider what...

Three Cows Looking Down

Be Your Own Boss: 17 At Home Business Ideas

One of the challenges of running a home-based business is deciding what type of business to start in the first place! With so much to consider, where do you begin? First, think about your definition of a home-based business. Do you define it as having your office and performing your work at your house? Or is it having an office at home but carrying out most of your work at another site or your customers’ locations? In this article, I’ll focus on at-home business ideas that allow an entrepreneur to have their office and perform most of their work within their home. I’ll also answer some...

Home Office With Wood Desk and Computer

How to Move A Business To Another State

When you move from one house to another, you likely have a checklist of things you need to take care of in the process from changing your mailing address and calling your cable TV provider and your internet company. But when moving your business to another state, many business owners don’t know where to begin. There are many reasons to consider moving your business to another state. For example: Your target market has changed—economically and/or demographically. The cost of real estate (including property taxes) has risen so much that your business is at risk of going under. The state has...

Business woman moving packing boxes

LLC vs. PLLC: Which Structure is Right for Your Business?

Choosing the appropriate business structure for your company is complicated. For attorneys, physicians, accountants, architects, and some other licensed professionals, there are extra factors to consider. Professionals who want liability protection and flexibility may feel drawn to the Limited Liability Company (LLC) structure. However, in many states, professionals whose jobs require licensing by the state aren’t legally allowed to form an LLC. Instead, they may have to form a Professional Limited Liability Company (PLLC). In this article, we’ll consider the LLC vs. PLLC, looking at the...

Businesswoman with question mark

Can You Have Multiple Businesses Under One LLC?

There may come a time when you decide to expand your business into an additional area of focus or take an online business to a storefront (or vice versa). These shifting operations lead business owners to wonder if they can have multiple businesses under one LLC. The short answer is, yes, you can operate multiple businesses under one LLC. However, before you jump in, you have multiple options to consider. The route you choose can impact you in several ways (including your liability and tax obligations), so it's critical to do your homework and weigh the pros and cons. I recommend talking...

Businesswoman with question mark

How to Start a Vending Machine Business

The vending machine industry is one that has evolved and steadily grown over the last decade. As consumers' lives get busier and people seek convenience and time-saving options while on the go, vending machine operators have many opportunities. According to Research and Markets, the global vending machine market size was estimated at $21.3 billion in 2020 and it is expected to reach $31 billion by 2027. That is a growth rate of 5.5%. The U.S. vending machine market is estimated at $5.8 billion with a growth rate of 8.9%.  Those numbers are impressive and they are fueling Americans' desire...

Woman Using a Vending Machine

11 Businesses to Start With $10K

Many entrepreneurs begin successful companies without piles of money in the bank. In fact, some businesses can get off the ground with $10K or less. So, if you’re dreaming of being your own boss but have limited funds, keep your chin up! In this article, I’ll touch on some low-cost business ideas to consider, how to start a business, what costs to expect, and tips for starting a business on a shoestring budget. Low Startup Cost Business Ideas Here are some types of entrepreneurial endeavors that can typically be launched without a lot of cash. Some require specific talents, while others...

Man Walking a Group of Dogs

Do LLC Owners Pay Self-Employment Tax?

Many small business owners choose to operate their companies under the LLC business structure. They do so with good reason! The LLC offers liability protection to its owners (members), tax flexibility, and compliance simplicity. However, that tax flexibility may cause some confusion for entrepreneurs. One of the tax-related topics that people often ask about is if LLC members have to pay self-employment tax. In this article, I'm going to cover that question, along with many others related to the subject. FAQs About LLCs and Self-Employment Tax Is Self-Employment Tax the Same as Income...

Man Running From Taxes

Adding Partners to an LLC

When growing your Limited Liability Company (LLC), you may come to the point where you want to add a partner (or partners) to help you scale your business. Whether you’re looking for an injection of capital, some with specialized knowledge or skills, or want to reward loyal employees, adding new LLC partners is fairly simple as long as you follow the rules required by your state and as stated in your LLC operating agreement. LLC owners are called members, so when you’re adding new partners, you’re actually adding new members to your company. How you add partners depends on the kind of LLC...

Business Women Working in a Cafe

C Corporation Tax Rates

There are many reasons companies choose to incorporate as C Corporations. Being a C Corporation is preferred if you plan to seek investors or take the company public. Also, because the C Corporation is a legal, taxable entity separate from its owners, shareholders’ personal liability is limited to the amount they have invested in the company. In contrast, owners of Sole Proprietorships and Partnerships are personally liable for the business’s debts and legal issues. Although becoming a C Corporation involves more paperwork and continuous compliance, many business owners find the C...

100 Dollar Bills Flying Away (Money)

How to Record the Buyout of a Partner

Sometimes business partnerships just don’t work out. Whether it’s due to disagreements or because one partner wants to pursue other opportunities, it’s essential to know what your options are when it’s time to split up a partnership. One common scenario is when one partner wants out, but the other partner (or partners) wants to continue the business. In that case, a partner buyout is a likely solution. Knowing the proper way to buy out a business partner will save you time, money, and a lot of hassle in the future. Here’s what you should know about a partner buyout. The Importance of a...

Woman Exiting Business Meeting

Can a Nonprofit Have a DBA?

Sometimes business owners want to market their services or products under a name other than their legal business name. For instance, a Sole Proprietorship, who must have both the owner’s first and last name in the business name, will want to use a fictitious name that’s more creative and compelling. They have to get permission to use that fictitious name by filing a DBA (doing business as). But other business entities, such as Nonprofit Corporations, may also have reasons for using a DBA. If you're wondering if a Nonprofit Corporation can register a DBA, the answer is yes and I’ll cover...

Doing Business As on Business Card

The Ultimate Checklist for Starting a Business in New York

Boasting a market of 8.5 million potential customers, New York State’s economic opportunities are limitless. With tax-based incentives, various resources, and training for business owners, New York is a great place to start a business and begin your journey of entrepreneurship. If you’ve been thinking about launching a company in New York, you’ve come to the right place. This article will walk you through the many things business owners should know and address to get their new businesses up and running. 1. Fine-tune Your Business Idea Before spending time and money starting a business in...

New York Skyline Against Water

Do I Need an LLC to Freelance?

Do freelancers need an LLC? That’s a question many solo professionals ask as they start and grow their small businesses. While freelancers aren’t legally obligated to form a Limited Liability Company, doing so offers some advantages over operating as a Sole Proprietorship. In this article, I’ll touch on the difference between running a freelance business as a Sole Proprietorship vs. an LLC. I’ll also summarize what’s involved in creating a Limited Liability Company and answer some frequently asked questions about operating as a freelance LLC. Sole Proprietorship vs. LLC Most freelancers...

Male Freelancer Working Remotely

S Corporation vs. LLC

Limited liability companies (LLCs) and S Corporations are business structures that provide liability protection for business owners and allow for pass-through tax treatment. While they have those things (and some others) in common, they differ in several ways, too. If you’re starting a business or considering changing a sole proprietorship or general partnership to an S Corporation or LLC, it’s critical to understand the similarities and differences. Every business and business owner’s needs are unique in some respects, so I encourage entrepreneurs to do research on their own and enlist...

LLC and S Corp Balanced

Which California Businesses Must File Form 568?

If you’ve decided to structure your business as a Limited Liability Company (LLC) and plan to register your company in California, it’s crucial to know how to keep your company in good standing by following the state’s compliance regulations. One regulation particularly important to California LLCs concerns their tax filing requirements. What is Form 568? Most LLCs doing business in California must file Form CA Form 568 (Limited Liability Company Return of Income), Form FTB 3522 (LLC Tax Voucher), and pay an annual franchise tax of $800. These businesses are classified as a disregarded...

Form 568 - Top Section

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