Business Formation

A Nonprofit corporation is one that is formed not for financial gain. It is formed to carry out the goals of the organization. The process to form a "for profit" versus "nonprofit" corporation is similar but the text of the Articles of Incorporation is different. There are no owners in a nonprofit corporation. A nonprofit corporation is controlled by a board of directors. The profits of a nonprofit corporation may not be paid to the creators of the nonprofit entity, except that the creators may receive compensation for the fair market value of actual services provided to the nonprofit. Generally, a nonprofit corporation is exempt from federal income tax, except with respect to "unrelated" business income.

SIC stands for the Standard Industrial Classification Code. It is a four digit number assigned to identify a business based on the type of business or trade involved.
The first two digits correspond to major groups such as construction and manufacturing, while the last two digits correspond to subgroups such as constructing homes versus constructing highways.
A company can determine its SIC number by looking it up in a directory published by the Department of Commerce, or by checking in the SIC book in the reference section of a local library.
SBA size standards are based on SIC codes.

Although you purchased a sole proprietorship for 1 amount, that amount must be allocated to the individual assets for depreciation purposes.
Allocation is based on the proportion of the sales price to an individual assets fair market value at the time of the sale. Speak to your local CPA about the allocation formulas.

A REMIC is an abbreviation for a Real Estate Mortgage Investment Company. Generally it holds a fixed pool of mortgages. A REMIC is not a taxable entity for federal income tax purposes. Generally, a REMIC is treated as partnership and the partners considered residual interest holders. Net income from the REMIC is passed through to the partners. The partners pass through income issued to the partner on Form 1066, Schedule Q and is reportable on IRS Schedule E, page 2.

Sole Proprietors with business expenses less than $5,000, do not have a net loss from the business, use the cash method of accounting, do not have an inventory during the year, have only one business as a sole proprietor, have no employees during the year, are not required to file Depreciation Form 4562, are not required to file Office in Home Form 8829 and have no prior year unallowed passive losses, may use Schedule C-EZ.

A limited partnership includes both general and limited partners. A limited partner is liable only to the extent of what he or she has contributed capital to the business. Limited partners are often investors that do not participate in the business decisions.

The corporate name you select must include a suffix.
It must be either spelled out or abbreviated. When you fill out the incorporation request, include your choice of Incorporated (INC), Corporation (CORP), Professional Association (PA), Professional Corporation (PC) or Limited Liability Company (LLC) / (LLP).

Generally, only one officer or director has to be appointed with the Articles or Certificate of Incorporation. This requirement may vary from state to state. Generally no more than three are created. Requirements for LLC's also vary from state to state. Speak to your local CPA about your corporations requirement's in your state.

Authorized shares of stock are the amount of stock that a company is approved to issue. Issued shares of stock are stock that has been issued to an entity. An entity may be a person, another business or certain kinds of trusts. Generally, stock must be issued for capitalization in most states.