MyCorp FAQs: Do I Need an Employer Identification Number?

An Employer Identification Number, also called an EIN or a Federal Tax Identification Number , is a unique set of digits assigned to a business by the IRS. With it, tax agencies can easily track the financial activity of your company, and make sure that you pay your taxes. employer identification numberBut, if you run a sole-proprietorship, the IRS can already do that using your personal social security number. So in what cases do you need an Employer Identification Number?

When you hire someone

The only time you can really get away with using your social security number is when your business is considered a sole-proprietorship, and you’re the only employee. The IRS figures, in cases like that, the company’s profit flows directly to you, and you pay your taxes from that. But that changes the minute you bring anyone on to help run the company, and that includes a business partner. Once you start hiring, your company must have an EIN.

When you form an LLC or Incorporate

Incorporating or forming an LLC separates you and the business. Continue reading

MyCorp FAQS: Can I Be My Own Registered Agent?

The short answer – yes. But, regardless, it may still be a good idea to hire someone else to be your registered agent. Registered agents exist because of due process. When you turn your business into its own, separate legal entity by forming an LLC or incorporating, you’re effectively giving it a right to due process. registered agentThat means, before a lawsuit can go forward, your business must be properly notified. A registered agent, then, is the point of contact for notifying your business about impending lawsuits.

However, many states use a business’s registered agent as a contact point for other important matters. They’ll send state documents, franchise tax forms, and other reminders to the company’s registered agent, rather than to the company itself, since reaching an established point of contact is a pretty reliable way of getting in touch with the business.

For a nominal fee, you can appoint someone to be that point of contact.

So why wouldn’t you want to be your own registered agent? Acting as your own registered agent will save money, but there are downsides to that choice. For one, a registered agent must have a physical address within the state the company was formed in. So if you formed and do business in a state other than your own, you have to designate someone in that state as a registered agent.

Further, registered agents are the contact point for sensitive matters like lawsuits or summons. Having a registered agent outside your company keeps the office from panicking, like they would if you were served in your own office.

And finally, your registered agent is going to get a lot of important paperwork. It’s their job to keep track of what they receive, and send it along to you. When you run a business, it’s easy to overlook or forget about things like annual reports and fees. A registered agent will really help you from losing track of that important paperwork.

You – or in some states, your business – can act as the registered agent. Or you can hire an outside agency. Just be sure, regardless of what path you choose to follow, that your registered agent is dependable and discreet.

MyCorp FAQs: What are the fastest filing states?

TimeUp next in our MyCorp FAQs series is “What are the fastest states?” It’s a question our customer service department receives on a regular basis. We get it, sometimes entrepreneurs are just very excited to get the ball rolling, and, other times, they find themselves in a desperate time crunch.

Though, like we’ve mentioned before, a lot goes into picking the correct state for the formation of your business, knowing which states file the quickest can help you make an educated, calculated decision. Continue reading

MyCorp FAQs: Should I file in a state with no income tax?

This is easily one of the most commonly asked questions we get. Each state has different rules and regulations when it comes to income tax. Most have both, some don’t collect personal income tax, and a few don’t college corporate income tax. And to a new business owner forming a corporation, forming in a state without a corporate income tax might sound awesome! income taxAfter all, who likes paying taxes?

Unfortunately, things aren’t that cut and dry, and there are good reasons why so many business owners opt to stay in the state that they do business.

You can form a corporation in another state

Continue reading

How MyCorporation Helps Franchises

Recently we’ve started exploring an often over-looked sector of American small business – franchises. Franchising is a major part of our economy, accounting for 4-5% of the country’s GDP, according to the IFA. It’s also a great way for people to be their own boss and open a business, without having to start from scratch. FranchiseA misconception amongst would-be franchisors, however, is that they’ll get everything they need from the main-office. While that’s partly true, there are a lot of ways MyCorp can help franchisors.

We act as another level of support

When you buy into a franchise, you usually get three things from the head office – a right to use its name, access to its system of success, and some assistance when you first start out. Continue reading

Business Basics: End of the Year Prep

The end of the year is right around the corner, and every year we hear small business owners panicking about December’s rapidly approaching end, wondering what they have to do to end the year right. Not to worry – ending the year is actually pretty easy, as long as you don’t wait until the last minute to get everything done! So if you haven’t already, start thinking about…
End of Year Prep

Submitting any filings or dissolutions

Some of the most common questions we are asked revolve around the best time to form an LLC or incorporate. And while there are no ironclad answers to those questions, the beginning of the year is normally a good time to send in that paperwork. Deadlines and renewal dates are easier to remember, staying on top of your taxes is simpler, and you can even file your paperwork early and miss the beginning of the year rush if you opt for a delayed filing. Continue reading

ABCs of Small Business Industry: P is for Publishing

We are onto the letter P in our weekly ABCs of Small Business Industry posts, and this week we are going to look at the publishing industry! The publishing industry has had its highs and its lows over the last few years. And, with a few major publishers facing rocky business, it is too easy to assume that the industry is on its last legs. However, small publishing agencies may be entering into a bit of a renaissance, and now could be a great time for new businesses to get into the publishing industry! But how do you do that? And what proof is there that the industry is doing better?publishing industry

What do you need to do to get started in the publishing industry?
Like most unregulated industries, you don’t need anything special to get started in publishing. A DBA and any local licenses and permits are, at the very least, what you need to open your doors. Continue reading

ABCs of Small Business Industry: I is for Insurance

This week we decided to cover a relatively broad small business sector – the insurance industry. Now, the insurance industry is a heavily regulated, slightly complex field to work in. There are tons of hoops that independent agents and brokers have to jump through before they are even allowed to open their doors. Insurance Industry But it is a vital industry – in some cases insurance is required by law – so a business could do quite well within it. So how do you start a company in the insurance industry? And is it worth all of the effort?

How do you get started in the insurance industry?
Insurance is a regulated field, which means you need to be licensed before you can begin. You also usually have to take some sort of course as well before the state will issue you your license. Continue reading

ABCs of Small Business Industry: G is for General Contracting

This week we’ve chosen to cover a very important sub-sector of the construction industry, general contractors. Now we did previously cover construction companies in an ABCs of Small Business Industry post. And you may be asking yourself if there are any differences between the two – don’t worry, there are. General contracting is a very specialized industry, with its own host of regulations and policies to follow. So how do you start a general contracting firm? general contracting

First, you need to be a licensed general contractor

Contractors are licensed, typically by the state. And without that license, you can’t offer your services as a general contractor. Licensing requirements vary from state-to-state, but most states maintain a database of active licenses, which the public can search through. Most of the companies looking for a general contractor will also want to see some sort of college training. Continue reading

Business Basics: Reasonable Compensation

This week we are looking at reasonable compensation, a legal necessity for anyone running a Corporation. Reasonable compensation is connected to one of the most fundamental parts of working for a company – getting paid – and yet it’s so widely misunderstood. When you form an Corporation, you create a separate, legal entity that ‘earns’ money. You then pull your wage from those earnings and pay whatever payroll taxes you owe. reasonable compensation

In order to close a loophole wherein those running the corporation could ask for an extremely low salary, pay next to no payroll taxes, and then close the wage gap with distributions, the IRS requires that all corporate officers and executive be paid ‘reasonable compensation.’ But what constitutes reasonable compensation is a little more murky.

Who needs to be concerned with reasonable compensation?

Anyone that is runs, or helps run, a C-Corporation or S-Corporation must be reasonably compensated for their work. Continue reading