/Business Filings

Applying for an EIN – FAQ

We are excited to bring you another post in our monthly FAQ series!

This month, we are discussing an integral part of business formations – EINs. An EIN (Employee Identification Number) is also known as a Federal Tax ID Number or FEIN. Whether a corporation or LLC, obtaining an EIN is an important part of starting a business!

Check out our CEO Nellie Akalp‘s answers to your burning questions below:

Q: What is an EIN?

A: An EIN (Employer Identification Number) is like a social security number for businesses It’s how the IRS identifies your company and tracks its activities.

Q: Who needs to get an EIN?

A: Your business is required to get an EIN if any of the following apply:

  • Your business is structured as a corporation or partnership
  • You have employees
  • You have a Keough plan
  • You file any of the following tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms
  • You’re involved with certain organizations as defined by the IRS

In addition, you’ll most likely need an EIN in open to open a business bank account and credit card.

Q: I’m a sole proprietor without any employees, can I get an EIN?

A: Yes, if you don’t fall into any of categories listed above, you’re not required by law to have an EIN for your business, but you still can get one. The main advantage in filing for an EIN as a sole proprietor is that you won’t need to give out your personal social security number to clients, vendors, and other business contacts.

 

Do you need help applying for an EIN or have a questions regarding the process? Call the CorpNet.com team today for a free business consultation at: 888.449.2638

                               

By | October 6th, 2016|Business Banking, Business Filings, FAQ, Starting a Business|0 Comments

Is Fear of Failure Holding Your Business Back?

Ghosts, ghouls and goblins—oh my! While children clad in Halloween costumes may fear witches and zombies, many entrepreneurs are equally terrified of failure. But since failure is an inevitable part of launching and growing a small business, fear of failure could be holding you and your business back from success. Whether your business is already underway or just getting started, here are six ways to overcome your fear of failure:

  1. Go step by step. When we’re scared, it’s easy for fear of failure to paralyze us and we end up doing nothing. Instead of taking an all-or-nothing approach, break down what scares you into small, manageable parts. For example, if you’re afraid to approach potential investors for financing because they might say no, break it down into smaller tasks: researching potential investors, making a list of the most promising possibilities, finding connections on social media to introduce you, developing your pitch and so on. Going step-by-step, you’re more likely to succeed, and each success will build your confidence.
  2. Do things right. Failure often occurs when we’re in a hurry and take shortcuts. In your excitement to launch your business or your next big idea, it’s tempting to skip the boring stuff and jump straight to the fun part. However, paying attention to foundational elements such as writing a business plan, choosing the right legal structure for your business, trademarking your business name and getting a business license can greatly increase your odds for success.
  3. Get help. You’re less likely to fail if you get advice from more experienced business people, professionals and mentors who have “been there, done that.” They can help you foresee possible problems and figure out how to surmount potential hurdles. Perhaps even more importantly, they can build your confidence by providing encouragement and support. SCORE and your local Small Business Development Center (SBDC) are two great, free sources of business advice and expertise.
  4. Celebrate your successes. It’s human nature to be critical of ourselves and focus on everything we’ve done wrong. Unfortunately, this can lead to a crippling fear of failure. Instead, focus on all the things you do right. Take some time to write down risks that you’ve taken—not just in business, but also in your personal life—and the successes you’ve enjoyed as a result. Giving yourself credit for all the good things you’ve done will build your ability to take on challenges with less fear.
  5. Do what scares you. Did you notice I said “less fear” in the prior paragraph, rather than “fearlessly”? No one is fearless, no matter how they may look on the outside. True courage means doing what scares us in spite of our fear. Really, the only way to overcome fear of failure is to try new things, knowing full well that you might fail—and that’s OK.
  6. Learn from your failures. No matter how hard we try, we’re bound to experience failure, especially when undertaking something as challenging as starting and growing a business. Make failure your friend by learning from it. Step back and assess exactly what happened, why it happened, and what you can do differently next time to prevent it from happening again. The more you learn from your failures, the less likely you are to repeat them.

 

                               

The Series LLC – All You Need to Know!

What Is The Series LLC (SLLC) Business Structure?

The series LLC (or SLLC for short) allows multiple “series” within a master LLC to operate as separate entities (with their own names, bank accounts, and record keeping). Each series can conduct business independently in this way because series LLCs’ articles of formation explicitly allow them to have unrestricted segregation of membership interests, assets, liabilities, and operations.

Different members and managers might run each series, and their rights and responsibilities might vary from series to series. Each individual series may secure contracts, own property, sue, and be sued without affecting the other series under the series LLC.

Most significant about the series LLC is the liability protection it provides. Similar to a corporation with subsidiaries, one series’ assets are protected from the liability risks of other series under the master series LLC. What’s particularly attractive about a series LLC is the level of protection it offers comes without the cost of setting up new legal entities for each series. The series LLC is subject to just one formation filing fee, no matter how many series are a part of it.

Where And How Can You Set Up A Series LLC?

Not all states allow the formation of series LLCs, so the structure is not an option for every business everywhere. States currently allowing formation of series LLCs include: Delaware, Illinois, Iowa, Nevada, Oklahoma, Tennessee, Texas, and Utah.

Forming a series LLC works similarly to forming a traditional LLC. It involves filing articles of organization in the state for your master LLC. (Most likely the state will require that your articles of organization express that the LLC is authorized to form series under it). You’ll also need to create operating agreements to document the rules for overall operations of the master LLC and for each series you know you want to form. The operating agreements for each series will define any unique rules that apply to the individual series. (Note that you can add more series as needed in the future.)

What Types Of Businesses Might Benefit From The Series LLC Structure?

Series LLCs offer a good deal of flexibility and simplicity. Business owners such as real estate investors with multiple properties, franchisees with multiple locations, and other companies with distinct profit centers might benefit from forming a series LLC to separate and protect each operation.

What Else Should You Know?

With series LLCs being a fairly new legal structure, not all tax issues are completely clear across the board. While federal proposed regulation considers series to be their own entities for income tax purposes (which means they must file their own tax returns and pay their own tax obligations), tax treatment at the state level could be different.

No matter what legal business structure you’re considering, I strongly encourage you to get trusted professional legal and accounting guidance before making that all-important decision. And after you’ve done your homework and have all the knowledge you need to choose wisely, don’t risk missing anything mission critical during the formation process. At CorpNet, we’re here to help you save time and headaches by taking care of all the filing details for you. From series LLCs to regular LLCs to S-Corporations to C-Corporations, contact us to cover all your business filing needs!