getting legit.. whats your company?

[Van Din]

Michael, while you are correct in the above stated, there is more ways to go public, and benefit form Stocks which can be sued not only to sale but to offer to your main People and or to trade them for goods, services, etc.

Maintaining it, yes it is costly, but with current opportunities given by NASD operated OTC Bulletin Board, which you can do for about 100k and no need for an Underwriter or excess of Millions of Dollars in yearly revenues, again each for its uses.

In my cases for both Ketchframe Corp. and GreenSolarEnergyCorp I needed to be C corp to take them Public for obvious reason do to the way this corporations will be operated and in how many countries will be operated.

Apart the public issue, wouldn't it be a better deal to go with a LLC?
________
SEX ADVICE FORUM

 

[Zakaree Sandberg]

Do it right, pay your fair share for wherever you live. Your fair share is not $0, unless the law says it is.

Absolutely! of course I will pay my fair share to the state I live in...

my tax issue is federal not state.. i have no problem paying my state its money

 

[Mark Allen]

my tax issue is federal not state.. i have no problem paying my state its money

Setting aside all issues what is right or wrong and agreeing or disagreeing with the ways taxes are spent, there is a quote from the movie Bugsy I wish I could give you verbatim, but I will have to paraphrase.

It's by Bugsy's boss when Bugsy (a gangster) is getting into Hollywood and casinos and such.

"Publicity is good for Clark Gable, you - not so good."

You're wanting to make movies, movies are publicity fueled. Just a thought, 'cause the government has only one opinion about taxes. I betcha Wesley Snipes isn't so happy with the people who convinced him otherwise. There have been others and there will be more.

Just keep it in mind.

 

[Doug Pasley]

what do you have? llc, s corp, so on...
how much do you pay a year for it?
is it under your name? or did you come up with a clever company name?
and along with that, which would be better to do?

Definitely go with an S corp to start off. It's the easiest to manage. Live and learn the benefits of the structure without investing a lot of time or money. As Michael Hastings said, it isn't that difficult to do it yourself. A lot of states have fill-in forms online for your Articles of Incorporation. There are plenty of books at Borders or Barnes & Noble to guide you through the process. The ones published by Nolo have always served me well. Also, don't get messed up with the Delaware and Nevada stuff, just incorporate in CA or wherever you do business.

I've never liked the LLC moniker. Whenever I see something like Zakaree Sandberg LLC, it screams out LIMITED LIABILITY. Not a great way to start a business relationship.

For your first corporation, I would encourage you to use a fictitious name. If you decide to sell the corporation in the future, it will have greater value to a buyer if your name isn't on the corporation. This will probably not be the only corporation you will form in your professional life, so save your name for when it has greater value.

Good Luck!

 

[Rick Darge]

Doug, great advice.

 

[Cristina S]

Also, don't get messed up with the Delaware and Nevada stuff

Why not Delaware? Why a mess?

 

[David W. Jones]

Zak,
Even running a DBA you should still have all your business expense deductions available.
Ketch has given you great advice...
Find a good Accountant up on the rules in your area who can advise you much better on your business needs than an internet forum.

All the Best!

 

[Scott Crawley]

Absolutely! of course I will pay my fair share to the state I live in...

my tax issue is federal not state.. i have no problem paying my state its money

To be legit, you have to get right with the law. Obey the rules of incorporation and pay the required taxes, not just the ones you believe in.

When you conduct your business in an iligitimate fashion you become a potential liability to everyone you do business with. For example; when the CEO or CFO of a publicly traded company is busted for federal tax evasion, it tends to have a negative effect on the stock. ;-)

le·git·i·mate   [adj., n. li-jit-uh-mit; v. li-jit-uh-meyt] Show IPA adjective, verb, -mat·ed, -mat·ing, noun
–adjective
1.
according to law; lawful: the property's legitimate owner.
2.
in accordance with established rules, principles, or standards.
3.
born in wedlock or of legally married parents: legitimate children.
4.
in accordance with the laws of reasoning; logically inferable; logical: a legitimate conclusion.
5.
resting on or ruling by the principle of hereditary right: a legitimate sovereign.
6.
not spurious or unjustified; genuine: It was a legitimate complaint.
7.
of the normal or regular type or kind.
8.
Theater . of or pertaining to professionally produced stage plays, as distinguished from burlesque, vaudeville, television, motion pictures, etc.: an actor in the legitimate theater.
–verb (used with object)
9.
to make lawful or legal; pronounce*or state as lawful: Parliament legitimated his accession to the throne.
10.
to establish as lawfully born: His bastard children were afterward legitimated by law.
11.
to show or declare to be legitimate or proper: He was under obligation to legitimate his commission.
12.
to justify; sanction or authorize: His behavior was legitimated by custom.
–noun
13.
the legitimate, the legitimate theater or drama.
14.
a person who is established as being legitimate.

 

[Michael Hastings]

Michael, while you are correct in the above stated, there is more ways to go public, and benefit form Stocks which can be sued not only to sale but to offer to your main People and or to trade them for goods, services, etc.

Maintaining it, yes it is costly, but with current opportunities given by NASD operated OTC Bulletin Board, which you can do for about 100k and no need for an Underwriter or excess of Millions of Dollars in yearly revenues, again each for its uses.

In my cases for both Ketchframe Corp. and GreenSolarEnergyCorp I needed to be C corp to take them Public for obvious reason do to the way this corporations will be operated and in how many countries will be operated.

Ketch, I think you may be confusing public with being able to sell stock - any corporation can issue, sell, trade stock. As stated in my post even S corps can have up to 100 shareholders - plenty for even a company for example the size of Red. S corps aren't allowed to have partnerships, corps, or non resident aliens as shareholders because the idea of S is to keep things simple and simply pass profits through to individuals essentially as if they were sole proprietors. For example an S corp couldn't sell or trade stock to AquaVideo Productions, Inc for an underwater system - but a C corp could. However an S corp could sell or trade stock to Michael Hastings for goods or services or cash.

If the minor restrictions from operating S aren't a problem it is easy to covert to C when the time truly comes to "go public".

There are also some other advantages to c corps. Since the main disadvantage is double taxation many closely held corps, where all of the stockholders are also employees with similar holdings and salaries, they avoid double taxing by simply making their salaries plus bonus equal to the corporate profits thus littlevtax difference between S and C.

 

[Scott Crawley]

S corporation stock sales are private transactions though, right? They are not traded publicly.

 

[Michael Hastings]

S corporation stock sales are private transactions though, right? They are not traded publicly.

Correct, as are the vast majority of C corp transactions since there are vastly more privately held C corps than publicly traded C corporations.

There are very few restrictions on private sales. However if the amount is high, for example $50,000, you better make sure it is to a "sophisticated investor" or you open yourself up to all kinds of potential legal problems down the road - mostly civil but in some cases criminal fraud as well.

Again, the differences between private and public has little to do with The S or C election, it has todo with how and where shares are traded and the vastly greater rules, restrictions and reporting requirements of a public corporation - not to mention the pressure for more short term and consistent profits.

 

[Curran Giddens]

There are also some other advantages to c corps. Since the main disadvantage is double taxation many closely held corps, where all of the stockholders are also employees with similar holdings and salaries, they avoid double taxing by simply making their salaries plus bonus equal to the corporate profits thus littlevtax difference between S and C.

yup. I have to make sure my corp has no profit at the end of the year. That has been pretty easy though even without paying myself a salary. I spend all the profits on new gear. haha. MA state has a $456 minimum excise tax. That is all I paid this year plus the $109 to file the annual report.

 

[sbroock]

But

But

yup. I have to make sure my corp has no profit at the end of the year. That has been pretty easy though even without paying myself a salary. I spend all the profits on new gear. haha. MA state has a $456 minimum excise tax. That is all I paid this year plus the $109 to file the annual report.

You've bought a capital asset within your company that will depreciate over time. That depreciation deduction can offset income within the C corp, but will not flow though to you as a shareholder. As the asset depreciates within the C corp (either over time or in one taxable year under a "section 179" deduction), and say you sell it later, you may generate a gain that will be taxed at corporate rates. The remainder after tax you can withdraw as dividend or salary, but there is your double tax.

It's really a timing issue, which has some advantages, but don't want to bore you with time value of money calculations.

 

[Curran Giddens]

Yeah, I do everything under "section 179" with a 5-year depreciation calculated using the 200% declining balance method.

 

[Jeff Kilgroe]

Having started a number of companies myself, I have a few pieces of advice for Zakaree...

First of all, pay your damn taxes. No one agrees with taxes or likes to pay them, but that does not make anyone exempt. Sooner or later, this will catch up with you and will cost you a lot more money..You may even have to sit in jail while you ponder where to come up with that money. If you have a registered business entity in the form of a Corporation or LLC, you will be hard pressed to do any real business with a bank or other business entities without a federal tax ID. If you have a federal tax ID and don't file your proper returns, even if you don't owe anything, eventually the IRS will hunt you down.

Next piece of advice is to find a good accountant and/or attorney that can help you get started. Many small business attorneys will offer a free consultation and discounted service to get you set up and running with the right company formation you need. There are advantages and disadvantages to being an LLC, S-Corp, C-Corp, etc.. Laws differ from state to state on how these companies are formed and will operate. You need to figure out which one is best for you and what you will be doing. This is where someone to assist you is very important when it's your first time out. These days, if starting a business in my state of Colorado, I know what type I need and when. But I don't know California business laws, so if I were starting a business there, I would definitely seek counsel in doing so. By and large, most states are similar, but it's always best to talk with someone who can help you decide what you really need.

Finally, you need to keep it simple. Don't over-complicate anything more than you have to. File all your tax returns on time, keep up with the paperwork and annual registration and report fees, etc... This minimizes your contact with government agencies and lets you keep a low profile of sorts. You will most likely want to register your business in the state you predominantly do business in. Once again, this simplifies some things. There really are no advantages to registering in other states these days, at least not for small businesses or single-owner entities. Delaware has a bigger reputation than warranted -- but it has a past on which this reputation was founded. Historically, it had some of the best anti-takeover protection, which was attractive to large businesses who planned to offer the bulk of their stock on the public market. More so, Delaware has been popular because their courts have more experience than any other with corporate law and proceedings. Historically, their courts have been favorable to corporate entities. Nowadays, if you register in one state and operate in another, you are more likely to be under a microscope. The feds are cracking down on that as it makes it more difficult to take legal action against a company when a plaintiff has to take their case to another state.

In most regards, LLC's and Corporations provide the same level of liability protection. The real difference is now the companies are structured and operated internally. LLC's are far more popular and versatile for most single-owner/operator businesses or even small and mid-sized companies. They can often be lower maintenance.

 

[Ketch Rossi]

Apart the public issue, wouldn't it be a better deal to go with a LLC?

No Van, an LLC is never better is the bottom of the scale.

Ketch, I think you may be confusing public with being able to sell stock - any corporation can issue, sell, trade stock. As stated in my post even S corps can have up to 100 shareholders - plenty for even a company for example the size of Red. S corps aren't allowed to have partnerships, corps, or non resident aliens as shareholders because the idea of S is to keep things simple and simply pass profits through to individuals essentially as if they were sole proprietors. For example an S corp couldn't sell or trade stock to AquaVideo Productions, Inc for an underwater system - but a C corp could. However an S corp could sell or trade stock to Michael Hastings for goods or services or cash.

If the minor restrictions from operating S aren't a problem it is easy to covert to C when the time truly comes to "go public".

There are also some other advantages to c corps. Since the main disadvantage is double taxation many closely held corps, where all of the stockholders are also employees with similar holdings and salaries, they avoid double taxing by simply making their salaries plus bonus equal to the corporate profits thus littlevtax difference between S and C.

No Michael, with 3 C Corps already established I'm not confused, but I guess I did explained wrong, thanks for putting it the right way, however for my cases S corp was not an option, I had to go with C corp. exactly for the Restriction applied in the S corps.

 

[Matt Gottshalk]

S-Corp: McGee Digital Media Inc.

 

[A. Clint Litton]

In a similar boat...not quite at the 100k mark but hopefully will be there soon. Would anyone here recommend against going S-corp if still earning peanuts (relatively speaking)? Living/operating out of Brooklyn, NY.

I know, need to consult an accountant/lawyer...just appreciate getting everyone's take on the matter.

Cheers,
Clint

 

[Michael Hastings]

As Jeff says there is little or no advantage to a small legitimate business to incorporate in another state. In fact, if you have a physical presence or operate most of your business in a state many will require you to register as a foreign corporation (foreign as in another state not another country) which often has the same fees as if you were a domestic (as in incorporated in that state) corp so you end up paying double fees.

As far as taking your info from an Internet forum, obviously you have to double-check but it can be useful to learn what questions to ask. Accounting and law have become so complex that it is impossible for a general practice to know all the subtleties of various businesses, like the tax breaks available for production companies in many states, or the accounting for the large production prepayments someone mentioned earlier.

 

[Doug Pasley]

In a similar boat...not quite at the 100k mark but hopefully will be there soon. Would anyone here recommend against going S-corp if still earning peanuts (relatively speaking)? Living/operating out of Brooklyn, NY.

I know, need to consult an accountant/lawyer...just appreciate getting everyone's take on the matter.

Cheers,
Clint

A lot would depend on your personal asset level. Do you own a home with equity? How much equipment do you have? I've been hearing people quote that $100K level for a long time, and $100K means something entirely different now than it did 5 or 10 years ago. So yes, get an accountant, but also take a couple of classes in accounting so you know your way around a P&L and Balance Sheet. This puts you on the same communication level with your accountant.

I would also encourage incorporating because of the reporting requirements. You can only make wise business decisions with the proper information, and having the discipline which corporate reporting requires pays off in so many ways.