FAQs

What’s a registered agent?

That’s the short way to say “registered agent for service of process”, which, I realize, probably still doesn’t answer your question. This is the individual or business that is charged with receiving legal process, i.e., claims from third parties and government agencies against the company. This gives the public someone to serve with legal process, since entities aren’t individuals you can find at work or home.

July 7th, 2015|0 Comments

Should I be an entity if I’m investing in real estate with other people?

Here’s the answer: It’s not uncommon for a person to want to protect themselves when in a group of people and use an entity to represent their investment. The individual(s) may have other personal duties, like being on an advisory board, or being an officer. Sometimes groups of people will form an entity to control [...]

January 9th, 2020|0 Comments

Can anyone own an S Corporation?

You probably didn’t think to ask this until you saw it was a question. Answer: No. S Corporations are restricted with respect to their ownership, one of the key factors why they can’t always be used. For example, no more than 100 shareholders can own shares in an S Corp, no shareholder can be a non-resident alien, and unless certain filings and compliance rules are met, they generally can’t be owned by other entities, only individuals.

July 7th, 2015|0 Comments

Can anyone own an interest in an LLC?

And therein lies a major difference between LLCs and S Corporations – because LLCs can be owned by practically anyone or anything, making them very useful for pass-through taxation, while being owned by other entities.

July 7th, 2015|0 Comments

If I’m the only member of my LLC, do I really have liability protection?

Yes. Well, you have the same liability protection as a multi-member LLC. There will be some specific exceptions. For example, if you are personally negligent or you are responsible for your company's payroll tax obligations, then you'll be exposed to personal liability. But being a single-member LLC won't change that. There may be instances where being in a partnership may change an outcome in an insolvency situation and certain specific other circumstances.

July 10th, 2016|0 Comments

When I form my corporation or LLC, is that a license?

No, but thanks for asking a weird question. You’re likely getting confused with some industries, like talent management, that may require you to obtain a license from a particular state agency. The formation of the entity doesn’t trigger automatic licensure, nor does it automatically require you to get a license for your business. Licensure for your business is separate and apart from forming an entity. And, in some instances, if you are required to obtain a license, that may dictate the kind of entity your form.

June 15th, 2015|0 Comments

What’s a Tax ID number?

I find that this is much more critical than some people think. A tax ID number is your corporation or LLC’s separate tax identity. Whether it’s opening a bank account, setting up payroll, or filing a tax return, this number is THE number for all purposes. Here’s how you can get one (good luck to you) or here's how you can get one (answered by me). Important note: you need some kind of tax identification to get a Tax ID Number. Usually that original identification comes in the form of an individual's Social Security Number (usually the person forming the entity if it's a small business). But foreign owners have a more difficult time doing this since they don't usually have Social Security Numbers; in that case, they need to apply for an individual tax ID number, and then use that number to get the Tax ID Number for the corporation or LLC.

June 15th, 2015|0 Comments

How do I get a tax identification number?

You can go to the IRS’s website, and go through their multi-page question and answer pages. Make sure you're ready with your SS-4, as the IRS may ask for that over the phone if it doesn’t like one of your answers. (PS, the IRS is not in the habit of liking.)

June 15th, 2015|0 Comments

If I convert my LLC from one state to, say, California, do I need a new Tax ID number for the LLC in California?

Since the LLC is just moving from one state to another, and not changing its structure or tax status, a new Tax ID number shouldn’t be required. The LLC would need a new Tax ID number, for example, if you terminate the LLC in one state and then start a new one in another state [...]

August 6th, 2020|0 Comments

Do I need an attorney for this process?

YES! Of course!! Actually, no. Though "need" is a funny word. An attorney is not required to incorporate an entity. But if you learn nothing else from bouncing around this website, it’s that there may be a great deal of things to consider, traps for the unwary, and housekeeping items that may make or break your liability protection. Consider yourself warned!

June 15th, 2015|0 Comments