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Jun 20, 2024
11:29:48pm
Senora Featherbottom All-American
I’m feeling charitable
1) if the company decides to keep its income as a stockpile against a future need, is that income taxed?

Yes - profits are taxed in the year earned.

2) is there an upper limit to the amount of cash it can stockpile without taxes?

N/A see point 1.

3) does that amount of stockpile create a danger of a hostile takeover if we don't sell the shares publicly?

LOL no. Hostile takeovers aren’t possible except in publicly traded companies.

4) how is the initial valuation calculated?

Filing a paper with a Secretary of State doesn’t create value. Usually it’s $0. If you invest cash or contribute assets it’s the FMv of those assets. Usually better to have low value so you invest it as a loan so the asset has a corresponding liability. You can

5) what's a reasonable amount of shares to establish upon company creation?

Depends on industry but if you’re a small mom/pop shop 1,000 is fine. Doesn’t matter much since % is what actually matters.

6) is there a lower or higher limit on initial stock value? Anything that might trigger the IRS?

Most often we say $0.0001 per share and the IRS is fine with that unless there have been assets actually contributed in which case it’s FMV of assets.

7) can a c corp pay for life insurance premiums on executives? Is it tax deductible? At 100%?

Yes and should be yes for all, but Company should be beneficiary not family.

8) does the type of life insurance matter? CVDP ok?

I believe company has to be beneficiary.

9) common strategies for increasing business costs to reduce tax burden?

Good record keeping.

10) corporate retreat is deductible at what rate?

Eh, talk to accountant.

11) are all / most costs associated with a corporate meeting tax deductible? Are there danger areas to be aware of?

Yes. But again talk to accountant.

12) do c corps have to have W2 employees?

No. Can be 1099s, but often 1099s are misclassified and should be w-2s so make sure to do it right.

13) are health insurance costs 100% deductible in a c corp? S corp? LLC?

If you provide it as a benefit yes. A little tricker in S corps and partnerships for actual partners.

14) how often are resolutions required to be filed? Monthly? Quarterly? Yearly?

No requirement based on calendar, but certain transactions require resolutions like issue equity.

15) what structural strategy is used to preserve privacy?

Not much is public. Not a big deal.

16) if we use a nominee, what do they actually do? Anything?

Don’t do that.

17) how is liability preserved? Can we lose our homes if a job goes poorly and we get sued?

Usually not but get insurance and do t commingle assets.

18) how do we limit liquidated damages?

That’s a matter of negotiating contracts carefully.

19) what business documents are included in the formation of a c corp? AOI? NDA? Operating agreement? Sales contracts?

Action by incorporation, organizational resolutions, bylaws, stock issuance agreements, sometimes NDAs and IP assignment docs etc. legal zoom is fine for mom and pop corps.

20) how do we research international tax issues?

Engage accountant

21) if we do business with an offshore company, but they have a US office or agent that xan pay invoices, do we need to worry about international taxes?

Big time it depends.

22) is there an advantage to layering c corp as a cash holding company and an s corp as the operating company that handles money/bills/invoices/ payroll?

Generally not.

23) can an entity own a c corp? Own stock?


Yes.
Senora Featherbottom
Previous username
Bill Moore Esq
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Senora Featherbottom
Joined
Oct 25, 2009
Last login
Jun 29, 2024
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11,719 (225 FO)
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Jun 20, 11:22pm
Jun 20, 11:55pm

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