An interview with Omni Resources on aiding new businesses in their first year by answering our most received client questions.
When it comes to questions that Omni Resources receives over the years, most questions are unique to the individual businesses we work with. Outside of custom business structuring questions, we would like to share with you several common inquiries that tend to stick out from the rest which we feel are helpful for all clients to know.
Question 1:
Interviewer: Why do I need to keep a copy of the IRS form 2553 to become an S Corp if I already mailed it to the IRS?
Omni Resources: It is required by your CPA when doing the first-year company tax return for IRS business form 1120S. It is critical that you retain a copy of form 2553.
Question 2:
Interviewer: What if I want more companies using my S Corp?
Omni Resources: A type S corporation can have up to 99 subsidiary companies beneath its corporate umbrella. This can be accommodated by using DBAs, fictitious names, or trade names. Different states refer to DBAs by different names, though the principle is the same.
Clients can find a DBA setup guide on the e-learning page found by accessing the client center. You are also welcome to contact Omni Resources directly for any questions.
Question 3:
Interviewer: What if I want more companies by creating an LLC?
Omni Resources: LLCs have a completely different structure from S Corps. LLCs are taxed the same as a sole proprietor by the IRS. They provide limited tax deductions and limited asset protection. LLCs are designed for 3-year periods and generally built for real estate properties though can be used for other purposes.
It is not recommended to own an LLC by itself due to lack of asset protection and lack of tax benefits. If an LLC is deemed necessary, the LLC should be owned by a corporation under the corporate umbrella, this enables the LLC to enjoy the tax benefits of an S Corp by being a subsidiary of a corporation. Contact Omni Resources if this is desired and necessary.
Question 4:
Interviewer: What are direct means for funding my business without the aid of investors?
Omni Resources: Without funding, few businesses get anywhere. We strive to provide our clients with greater confidence and security with funding needs and offer education and advice on this topic directly.
There are four areas of immediate capital or financing available to you as business owners and as clients at Omni Resources. As described in phase 2 of the Omni Resources e-learning curriculum, major credit cards are highly valuable to building credit and securing funding. More information on credit can also be found in this credit information newsletter.
The next useful tool is mortgage loans. Properties refinanced or purchased by a business could receive better interest rates and receive property tax, depreciation, and maintenance write-offs much higher than anything under a personal purchase. The loan itself helps build credit and credit history. As equity is grown in the property, it can later be used for further leverage for liquidity, if needed.
The third area is commercial loans for commercial properties. Residential property can qualify for a commercial loan. Commercial property loaned commercially is done via a commercial loan.
The fourth avenue is the personal loan. This option requires you to shop around for personal loans from lenders. To loan personal money to your business from personal loans or personal savings, it would be necessary for your business to sign a promissory note agreeing to the terms of paying you back your personal money.
Question 5:
Interviewer: Should I be aware of any tax deadlines for my S Corp?
Omni Resources: All 1120 S tax returns are due to the federal government March 15. If this is not possible, an extension MUST be filed by that date. When doing taxes for your household or your company, best practices are to prepare your taxes 60 days before the need to file. If a business or individual files for an extension, after a 6-month period, the extension is no longer good.
Question 6:
Interviewer: If I do not maintain corporate compliance when filing my business tax return with the secretary of state, what are the repercussions?
Omni Resources: Failure to comply with filing taxes will cause your company to potentially undergo an administrative dissolution if you are delinquent by more than 1 year on your annual report fee. Your business will be assessed a penalty of $194 for each month of filing the business tax return delinquent. It is best to be proactive about meeting all tax deadlines and to meet all compliance requirements.
Question 7:
Interviewer: What do I need to know to do business outside of the state my corporation is currently registered in?
Omni Resources: In general, you are doing business in a state different from where you are incorporated in if you have one or more of the below listed similar scenario:
• You own real estate or property in a State or Country different from the original State of incorporation
• You have a business bank account in a State or Foreign Country different than the State originally incorporated in
• You have a home office, manufacturing or distribution facility, or retail store in a different State or Country than the State originally incorporated in
• You operate a freight transportation, trucking, or hauling business outside of the State or Country originally incorporated in
• You transact any type of business in a different State or Foreign Country than the state originally incorporated in
You must understand that if you do business in other states, you must get a foreign and domestic form completed. Contact Omni Resources if this is the case. A surefire solution for doing business outside your incorporated state is it requires the certification by other states to do that. You can also learn more about foreign entity registrations in this newsletter here
Question 8:
Interviewer: I can’t find the Omni Resources Checklist for my business. Where is it?
Omni Resources: The Omni Resources Checklist is essential for tracking your progress and growing your business using the proper, established steps. The Omni Resources Checklist can be found here under the e-learning page in the client center on the Omni Resources website. Be sure to check tasks off as you complete them.
Thank You
As a business consulting firm, we strive to provide you with the best possible service, and your feedback and support help us to continuously improve. Thank you for your time, attention, and ongoing support to help us help you.
We look forward to continuing to work with you and to providing you with the highest level of service possible.
Are you preparing to start another business of your own or do you know someone who is seeking guidance for starting a new business venture?
Chat with us to find out how Omni Resources can help your new business or your existing business get on track more efficiently.
Questions?
call (888) 882-8483
clients@omniresources.net
This Month’s Quote:
“You don’t have to change that much for it to make a great deal of difference. A few simple disciplines can have a major impact on how your life works out in the next 90-days, let alone in the next 12-months or the next 3-years.”
~ Jim Rohn, referred to as “America’s foremost business philosopher.”
Editor’s note: Nothing in this blog post should be construed as legal advice of any kind. Any legal, financial, or tax-related content is provided for informational purposes only and is not a substitute for obtaining advice from a qualified legal or accounting professional.
