Business Formation
The most frequently asked tax questions related to Business Formation
What is a REMIC ?
Asked Friday, November 03, 2000 by an anonymous userCPA Answer:
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 Proprietorship - Schedule C
Can I file using short Form Schedule C-EZ instead of long Form Schedule C?
Asked Tuesday, October 24, 2000 by an anonymous userCPA Answer:
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.
What is the difference between Co, Inc and Ltd ?
Asked Monday, October 16, 2000 by an anonymous userCPA Answer:
All these terms refer to incorporated companies. A limited corporation or company is an incorporated business.
What is a Limited Partnership ?
Asked Monday, October 16, 2000 by an anonymous userCPA Answer:
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.
Does a corporate name have to include a suffix ?
Asked Monday, October 16, 2000 by an anonymous userCPA Answer:
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).
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).
What is the difference between Authorized and Issued shares of stock ?
Asked Monday, October 16, 2000 by an anonymous userCPA Answer:
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.
Does one stock certificate represent one share of stock ?
Asked Monday, October 16, 2000 by an anonymous userCPA Answer:
Generally not. One stock certificate can represent any number of shares of stock up to the amount authorized, as stated on or in the Articles or Certificate of Incorporation.
Is there a fee for reserving a name when incorporating ?
Asked Monday, October 16, 2000 by an anonymous userCPA Answer:
Generally yes. In most states a fee ranging from $20 to $75 will be charged for name reservations.
In the incorporation process , what are the Articles of Incorporation ?
Asked Thursday, October 12, 2000 by an anonymous userCPA Answer:
After a person selects the corporate name and state of incorporation, a document called The Articles (or Certificate) of Incorporation must be filed with the Secretary of State of the state of incorporation. The key sections are the Corporate Name, the Purpose of the corporation, Duration, Authorized capital, Name and address of the registered agent and Other required provisions. Speak to your local CPA about the filing requirements and content of the Articles of Incorporation.