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FREQUENTLY ASKED QUESTIONS

Our FAQ will answer the most common conundrums that we notice physicians struggle with. From start-up to well-established practice, we have the answers to get you started (or back) on the right track. Didn't find an answer? Contact us today to be set-up with your financial advisor who will be sure to have the answers you need.
BUSINESS FORMATION
How do I decide on the type of entity to form?

One of the first decisions you'll make is the type of business you will open. You have several options to explore, including where you'll do business, how you will structure your business, and how you will conduct business. Additionally, you should explore opportunities that exist for people with specific characteristics. Email us, or give us a call, and we can discuss the various types of entities, and what works best for your situation.

Do I need bylaws or an operating agreement for my company?

While bylaws are not required by law, they do need to comply with state law and are essential to the success of your company. Bylaws list membership requirements, duties and responsibilities, and other operational procedures that allow your company to run smoothly. Articles of incorporation and bylaws must be adopted by the majority of your members according to most state laws. Operating agreements are not required by most states and are not filed at your state office. However, an operating agreement is highly recommended for multi-member LLCs because it structures your LLC's finances and organization, and it provides rules and regulations for smooth operation. Percentage of interests, allocation of profits and losses, member's rights and responsibilities, and other provisions are usually included here.

What is a fictitious name?

The legal name of your business is required on all government forms and applications, including your application for employer tax IDs, licenses and permits. However, if you want to open shop or sell your products under a different name, then you may have to file a "fictitious name" registration form with your government agency.

A fictitious name (or assumed name, trade name or DBA name, which is short for "doing business as") is a business name that is different from your personal name, the names of your partners or the officially registered name of your LLC or corporation.

For example, let's say Mary Smith is the sole proprietor of a catering company she runs out of her home. Mary wants to name her business Seaside Catering instead of using her business' legal name, which is Mary Smith. In order to use Seaside Catering, Mary will need to register that name as a fictitious business name with a government agency. The appropriate government agency depends on where she lives. In some states, you have to register fictitious names with the state government or with the county clerk's office; however, there are a few states that do not require the

Does my business need a tax identifiation number (EIN)?

Employers with employees, business partnerships and corporations, and other types of organizations, must obtain an Employer Identification Number (EIN) from the U.S. Internal Revenue Service. The EIN is also known as an Employer Tax ID and Form SS-4.

Why do I need a registered agent?

Most businesses are not individuals but instead business entities such as corporations or limited liability companies (LLCs). This is because there are substantive (and substantial) liability protections as well as tax advantages to being "incorporated" as opposed to being "self-employed". Most jurisdictions in the United States require that any business entity that is formed or doing business within their borders designate and maintain a "Registered Agent". This person may be known as the "Resident Agent" or "Statutory Agent", depending on the laws of the individual jurisdiction in which the business entity is registered. The purpose of a Registered Agent is to provide a legal address (not a P.O. Box) within that jurisdiction where there are persons available during normal business hours to facilitate legal service of process being served in the event of a legal action or lawsuit. Generally, the registered agent is also the person to whom the state government sends all official documents required each year for tax and legal purposes, such as franchise tax notices and annual report forms. It is the registered agent's job to forward these suit documents and notices to the entity itself. Registered Agents generally will also notify business entities if their state government filing status is in "Good Standing" or not. The reason that these notifications are a desired function of a registered agent is that it is difficult for a business entity to keep track of legislative changes and report due dates for multiple jurisdictions given the disparate laws of different states. Penalties for not maintaining a registered agent

Do I have to file anything to dissolve my company?

In most states, you essentially have to file your corporation in reverse. This typically involves filing articles of dissolution, in addition to a public notice requirement.

BUSINESS ACCOUNTING
How does the structure of my business impact my taxes?

Different types of entities are taxed differently. Email or call us, to discuss your specific situation.

What expenses can my company pay?

You can deduct the cost of operating your business. These costs are known as business expenses. These are costs you do not have to capitalize or include in the cost of goods sold. Contact us to discuss your specific situation.

Why should I keep records?

Good records will help you monitor the progress of your business, prepare your financial statements, identify source of receipts, keep track of deductible expenses, prepare your tax returns, and support items reported on tax returns.

What kinds of records should I keep?

You may choose any recordkeeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal taxes.

How should I record my business transactions?

Purchases, sales, payroll, and other transactions you have in your business generate supporting documents. These documents contain information you need to record in your books and will be necessary when time arrives.

PAYROLL
Am I required to take payroll?

As an officer of your company, you are an employee and the IRS and Dept of Labor say that you are required to take a reasonable salary.

What is a reasonable salary?

As is the case with most government requirements, they do not explicitly tell you. We say that a reasonable salary is sufficient to fully fund retirement plans and allow you to make monthly rather than quarterly payments for your taxes.

Do I have to make quarterly estimated payments?

You do have to make some tax payments during the year. These can be either monthly or quarterly. We prefer to make tax payments via payroll to allow for greater flexibility during the year.

FINANCIAL PLANNING
What is financial planning?

Financial planning is our process to help you identify and quantify your objectives, so that we can organize and execute a system with your finances to accomplish those objectives.

How much should I invest?

Once we identify your goals, we start with understanding and analyzing amount of assets needed for your goals, review current progress, and determine the amount needed to invest towards them.

What type of account should I invest in to maximize tax efficiency (IRA, SEP-IRA, Solo 401k, etc.)?

We help business owners open the most efficient type of accounts to accomplish their goals and maximize the tax benefits associated with various types of accounts based on their financial picture.

Do you help with investing?

Yes! NovaPoint Capital, LLC is an institutional investment firm that manages investment assets for other professional investment firms as well as individual investors and families.

How much risk should I take with my investments?

This is unique to each investor and their needs. We have an innovative process to identify your goals and quantify your risk profile, which enables us to construct the appropriate investment portfolio tailored to you.