New Corporate Governance Subscription Service

Are you a founder, officer, or major shareholder of a c-corporation? If so, keep reading…

Corporate governance – nobody likes doing it, but it’s essential to maintaining your corporation’s liability shield. Also, if neglected or done incorrectly, it can be expensive to clean up, and can hold up important, time-critical transactions.

That’s why we are launching a new Corporate Governance Subscription Service for c-corporations. For a monthly subscription fee of $129, we will assist you with various corporate governance tasks, enabling you to focus on running your business.

What’s included:

  • Annual shareholders consent action, electing board of directors for upcoming year, and ratifying all actions taken by board of directors and officers
  • Annual board of directors consent action, electing officers for upcoming year
  • Unlimited board resolutions throughout the year, to authorize a variety of actions – issuing stock and stock options, entering into contracts, etc.
  • Assistance with filing annual report and other periodic filing and reporting obligations
  • Reminders when annual meetings and filings are due

How does it work?

  • Subscription fee is $129/month.
  • Each month we will bill your credit card for the monthly subscription fee.
  • Three-month minimum is required. After that, you can cancel at any time, and services will terminate at the end of that month.
  • All subscriptions are subject to our conflicts check, to ensure no conflicts of interest

Contact us now to sign up, and sleep easier knowing that we are taking care of this tedious but important task for you.

 

This is an attorney advertisement.

 

 

Delaware Franchise Taxes – Read This Before You Pay!

If you have a startup incorporated in Delaware, this is franchise tax season. Your franchise taxes for 2015 are due by March 1. Before you do anything, you need to read this post.

There are two methods of calculating your franchise tax, and this is really important – Delaware allows you to choose the method that results in the LOWER tax. So you absolutely need to run your numbers through both methods, using the handy calculator that you can access here, using the calculator at the bottom of the page. We’ll run some typical numbers, so you can see how radically different the results are. Let’s say you have 10 million authorized shares, par value $0.0001, and have issued 7 million to founders. Your company has gross assets of $25,000. If you use the Authorized Shares Method, your franchise tax will be $75,175. No, that’s not a typo. Now plug your numbers into the Assumed Par Value Capital Method. Under this method, your franchise tax will be $350. That’s a huge difference. I just saved you $74,825. You’re welcome!

I can save you even more money. If your registered agent sent you the notice about your franchise tax, they probably offered you their service for paying the tax. Of course they charge a fee for that service. You don’t have to use it, however. You can pay your taxes directly, at this link. Just make sure you try both methods to calculate your tax, and use the method that results in the lower number.

Follow me on Twitter @PaulHSpitz

End Of Year Corporate Housekeeping

shortcuttingThe end of the year is typically a good time to handle any housekeeping issues. If you have a corporation or an LLC, your state may require you to make some kind of annual filing. Here is a quick overview of the requirements for Ohio, Delaware, Kentucky, and California.

Ohio

You can relax, corporations and LLCs in Ohio do not have to file an annual report.

Delaware

Delaware for-profit corporations must file an annual report and pay a franchise tax. The filing fee for corporations is $50, plus the taxes due upon filing of the annual report. These are due no later than March 1 of each year. The minimum tax is $175, and the maximum tax is $180,000. Taxpayers owing $5,000 or more pay estimated taxes in quarterly installments on the following schedule: 40% due June 1, 20% due by September 1, 20% due by December 1, and the remaining 20% due March 1. There is a franchise tax calculator available here for figuring out your tax obligation.

When computing your Delaware tax liability, keep in mind that there are two alternate methods: the authorized shares method, and the assumed par value capital method. They produce very different results. Let’s look at the example of a corporation with 10 million authorized shares, par value $0.0001 per share, of which 5 million are issued, and gross assets of up to $500,002. Under the authorized shares method, the tax liability is $75,175. Yikes. Under the assumed par value capital method, the tax bill is only $350. Make sure you try both methods when preparing your annual return.

Delaware LLC’s do not have to file an annual report, but they do have to pay an annual tax of $300. This tax is due no later than June 1 of each year.

Kentucky

Most businesses operating in Kentucky must file an annual report with the Kentucky Secretary of State. The exception is for sole proprietorships. Kentucky will send out a postcard reminder in January to all registered corporations and LLCs. Businesses will then have until June 30 to complete and return the postcard (or file online). There is a filing fee of $15.

Kentucky also imposes an entity-level tax on corporations and pass-through entities (like LLCs and S corporations). This is called the “limited liability entity” tax, or “LLE” tax. The LLE tax calculation is equal to the lesser of 9.5¢ per $100 of the taxpayer’s gross receipts or 75¢ per $100 of the taxpayer’s Kentucky gross profits. The minimum LLE tax is $175. There is a credit available for shareholders and partners of pass-through entities that they can claim on their personal tax returns.

California

In California, corporations and LLCs must file a Statement of Information within 90 days after filing their original articles of incorporation (or registration, in the case of “foreign” corporations or LLCs), and every two years after that. The filing fee is $25, and can be done online. You can find more information on how to file at this link.

In addition, corporations and LLCs in California must pay an annual franchise tax. The minimum annual franchise tax is $800, even if your company has zero revenue. This franchise tax is due by March 15 of each year. Which form you use depends on what kind of organization you have, and how it is taxed. Your accountant will be able to determine the appropriate form.

That’s it for your end-of-year corporate housekeeping. Make sure to mark your calendars if you have upcoming filing obligations. In the meantime, have a happy new year!