Comments on:

By: Jeffrey Unger

Jeffrey Unger — Sun, 21 Feb 2010 19:04:28 +0000

New York law (and the law of all states) requires a company to qualify to do business if the company is engaged in more than just an isolated transaction in the state. In your case, if you have moved to New York, the law does indeed require that you qualify to business in New York. Regrettably, this means that you will be liable for franchise tax to both New York and California for 2010. When restructuring your company, you might consider forming in Delware and qualifying to do business in New York, so that you can avoid this problem in the future if you leave New York. For more information on forming in Delaware to achieve mobility, see this video http://www.eminutesonline.com/what-is-the-benefit-of-incorporating-in-delaware-watch-video/

By: Davida

Davida — Fri, 19 Feb 2010 13:23:09 +0000

I have an S Corp created in California a couple years ago and I recently moved to New York. I have been told I should dissolve the corporation in CA and recreate it in NY but I missed the date to do so without paying the annual $800 tax for 2010. I don’t want to just throw that money away and was hoping I could just ride out the year and change it end of 2010 as the company really isn’t profitable yet. I just got a new temporary consulting gig and now I’m in NY so not sure what to do in regards to payment. Thanks.

By: Emilio

Emilio — Mon, 30 Nov 2009 06:25:01 +0000

HI,
I have been in the US for 13 years, the first 6 years I had a student visa, thereafter I have been residing in the US with the TN visa. I was just granted a new TN visa for 3 years. I have a social security number and I pay taxes. Can I become part of an american S corporation by meeting the IRS’ “substantial presence test”?

By: Jeffrey Unger

Jeffrey Unger — Wed, 05 Aug 2009 17:33:24 +0000

With a few limited exceptions, only individuals can be “S” corporation shareholders. In other words, a corporation (foreign or domestic) cannot be a “S” corporation shareholder. See IRC Sec 1361(b)(1)

By: Antonio

Antonio — Thu, 23 Jul 2009 00:42:45 +0000

I know a foreigner can not be a shareholder, but can a foreign corporation be a shareholder of a “s” corporation?

By: Jeffrey Unger

Jeffrey Unger — Fri, 17 Jul 2009 18:38:41 +0000

A lawyer can and will help take over the process, but the first question is whether it made sense to select a LLC (rather than a corporation) as the business structure in the first place. A lawyer and/or a CPA should be consulted to make initial decisions regarding the choice of entity and the choice of jurisdiction. If in fact a LLC is the right choice, an experienced lawyer could certainly take over the process. In our firm, we believe LLCs should be used as an entity of last resort due the the high “junk” fees many states have imposed on LLCs. See, http://www.youtube.com/watch?v=MpT774KgPMU

By: Tina States

Tina States — Fri, 17 Jul 2009 17:59:57 +0000

I have done just as you stated: I’ve begun the process of filing the articles for my LLC and now I have realized there is much more to be done. Will/can a lawyer take over once the process has already begun? Do I have to start over?

By: Jeffrey Unger

Jeffrey Unger — Sat, 20 Jun 2009 18:31:41 +0000

It’s so easy to jump online and form a new company without a lawyer, but the initial steps of forming a company (filing the Articles) set the wheels in motion for all sorts of ramifications. That one little act – filing the Articles, which consists of one piece of paper and a nominal filing fee – is a decision that sets a business down a path. A path that is very hard to change without delay, inconvenience, and expense. It pays to learn exactly what decisions are being made when the Articles are filed. I’m not suggesting that every entrepreneur in America should use a lawyer to form a new company, but if you don’t, I would suggest that you speak with a CPA or some advisor to learn the ramifications of filing Articles. Without a lawyer, you can easily get the process started, but first educate yourself on the right entity choice, jurisdiction, structure, etc. Doing so will avoid unbelievable inconvenience later.

By: Wayne Burke

Wayne Burke — Sat, 20 Jun 2009 15:48:03 +0000

Do I need a lawyer to start a LLC?

By: John Holden

John Holden — Sat, 02 May 2009 00:43:11 +0000

I was laid off recently, and I am starting a new construction company. I’ve heard that Nevada is the place to set it up. What do you think, Jeff?

From Jeff: The idea of forming a corporation in Nevada is one of the biggest myths of the business world. Unless you are actually planning on doing business in Nevada, there is no benefit to forming a corporation there. If you do so, you would also need to “qualify” to do business in California, which subjects you to the same fees, taxes, and laws that would apply if you form the corporation in California in the first place. Plus, you would have to pay Nevada annual fees, a business license fee, satisfy annual filing requirements, as well as incur the cost of a Nevada resident agent.