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Compliance Issues You May Not Know About...

Author: Keith Huggett 

You may have noticed that I have been writing quite a bit about corporations and compliance lately. There is a reason for it.  Many a corporation have fallen under the watchful eye of the IRS for not keeping compliant. You may be unaware of some issues that come under their purvue.  So, here we are, letting you know about them.

As a corporation there are many things that you have to decide initially. Which business structure is the right one for you? Having made that choice, have you gathered all of the correct paperwork for your corporation together and formed your Corporate Book? Have you issued your stock? Have you set up your payroll? Did you set it up correctly so that payroll taxes do not become an issue for you later? Payroll is a very large issue that can haunt you in the future. It is wise to consult your tax professional about setting up a payroll service to handle this for you so that your payroll taxes are taken care of.

To answer all of these questions and more, our business specialists have put together an informational white paper, entitled "Staying Compliant in a Corporate World."  It will answer questions about payroll, "reasonable compensation," business entities, and much more.

For questions regarding corporations or other business services, please contact The Tax Office, Inc. at (916) 773-7053(916) 773-7053.

Keeping Your Corporation Records Correctly

Author: Keith Huggett

What is a Corporate Record book? To maintain your legal corporate status, as a corporation you are required to compile a Corporate Record Book, a book of organizational and other documents which need to be stored at your primary place of business.  The book is made up of five sections, with each one containing specific information. Think back to your school days when you put together notebooks with dividers. It is really much the same. Or, if your happen to be more into scrapbooking, you could go that way, but it's a little over the top

Section One

1. Make sure the original filing of the corporation, date of filing, and payment have all been recorded. These are first few pages in your Corporation Record Book (CRB).
2. Request a Certificate in Good Standing from the state. Include this, along with your Articles of Incorporation and any amendments in your CRB.
3. Write your Bylaws and place a copy of these in your book. Formally write out every action you take as a corporation. Document every act the corporation takes and record it in your CRB.

Section Two

1. Write out the minutes of the initial meeting to form the corporation. Also include the election of officers and Board of Directors.
2. Write out the initial resolutions to form the corporation. Also include any initial agreements between the corporation, lawyers, and accountants for services.
3. Keep this section open to hold all documentation of meeting and minutes while the corporation is functioning. Keep any future elections or resignations here as well.

Section Three

1. Place all stock certificates issued in this section. Ownership of each certificate must be recorded with the sate of issue, who received it, and their personal information (age, residence, individual or corporate entity).
2. Write out shareholder rights and voting agreement and include  the resolution which approves these documents. These are also included in this section.
3. Keep any shareholder or stock transactions of the corporation here as well. Also record here the amount of shares each person or entity has in the corporation. Any changes in shares will go here.

Section Four

1. Include any loans or grants made by members, officers, or directors to the corporation. This applies especially to money first given to the corporation startup. Resolutions and contracts for loans and their acceptance must be recorded here.
2. Write out the location of the corporation accountants, legal representation, insurance agents, and other professional people which the corporation uses to carry out business.
3. Include the location of legal and insurance documents as well as their date of purchase and receipt of payment for retainers and binders.

Section Five

1. Make sure you write out any decisions as resolutions. Write out any agreements or discussions of resolutions as well. Include all documentation of these here. Any major purchase, sale, policy creation or change, expansion or termination must be written out as a resolution of the corporation officers and included in this section.
2. Use your corporate seal or a notary to formalize any agreements between the corporation and other persons or entities.
3. Include any documents with these seals in this section as well.

Keep this record book at your main place of business. Once you have these records put together, you will use them in many ways. You can refer to them to determine your company goals, your company direction and mission.

The specialists at The Tax Office, Inc. can answer any questions you may have on entity selection, corporate compliance, corporate tax, or new business start-ups. We're here to provide you with the answers you need. Please, contact us, should you have any questions.