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Tag Archives: corporation filings

Why Your LLC, Corp, PA, PC May Not Be Valid

You probably formed your company, whether it is a LLC / Corp / PA or PC, for a variety of reasons. Some of these reasons may include protecting your personal assets, defining ownership if you have partners, or simply so you had a separate set of accounting records in the event you have employees or various retirement plans. How would you feel if someone were to tell you that this did not do the job you wanted, only because your entity was either not set up correctly in the first place, or that you have failed to properly maintain your entity? As an LLC / Corp / PA or PC, you have ongoing obligations that must be met in order to maintain your “corporate veil” of protection. Failure to do so will allow an attorney to “pierce the corporate veil” which can open you up to personal liability, and make your personal assets fair game to civil judgment. Read on to protect yourself from making this mistake.

Bylaws

The bylaws contain the most fundamental principles and rules regarding the nature of the corporation, and are generally the governing document. In simplistic terms, corporate bylaws define the Name, Objective, Members, Officers, Meetings, Executive board, Committees, and ability to make Amendments. Your corporation does not formally exist until bylaws have been adopted, unless otherwise provided by law.

Operating Agreements

LLC ́s are very flexible in nature and the operating agreement defines each member or manager’s rights, powers and entitlements. This includes capital accounts, membership interest, distributions of profit and allocated tax responsibility, just to name a few. This is an agreement agree to by the company members that contains provisions for critical items and rules that run the company. Operating agreements can be amended at anytime by the company members or managers; however, one is necessary to prove that any given member is indeed separate from the entity itself. Similar to corporate bylaws, the LLC does not formally exist until an operating agreement has been adopted by the members.

Fictitious Name Filing

This filing states that an entity other than a person will be doing business in a given county. While this may seem mundane, this is a requirement, and must be filed in a specific newspaper in the county in which you will be doing business. In addition, a similar filing must be made when you choose to close your business. Failure to file for a fictitious name can result in local fines and restrictions from obtaining necessary permits and licenses.

Board Meetings

If you want the protection provided by being a corporation, you actually have to act like a corporation. This means that you must vote on a board of directors, and actually document that you had meetings, what was discussed, and what you decided to act on. This is one of the first items an attorney will ask for when trying to piece the “corporate veil”. Make certain you do this on a regular basis, or get some assistance to make sure your board meeting minutes are produced, and kept in your corporate compliance book.

Annual Reports

Your corporate annual report is due the beginning of each year, and the due date varies from state to state. This form requires you to provide information on corporate officers and your registered agent. Failure to complete this form, and pay your annual renewal fee on a timely basis will result in your company being “administratively dissolved”. If you have any corporate debts, and you are administratively dissolved, you just became personally liable for those obligations, as your company no longer exists.

You spent a lot of time and effort to get your business started and making money. We all understand that you can get caught up in the day to day operations of your business, and lose track of some of the things that are required, but, do not generate sales for your business. So before you let too much time pass, and your company no longer exists, give us a call. We will work with you to bring your filings up to date, and make certain they are current on a going forward basis.

My Professional CFO, LLC, is a Business Management firm providing the highest level of service in three key areas of importance to Independent Contractor Physicians, Small Business Owners and Entrepreneurs.

We specialize in Corporation filings and ongoing Compliance, Accounting and Payroll, and Investment Management. Our professionals will assist you in forming the appropriate type of company for your situation and work with you to make sure your company remains compliant. We provide ongoing Accounting and Payroll services to make certain all bills are paid and necessary tax forms and withholding payments are made in a timely manner, as well as the set up and management of your retirement accounts.

We are not simply a document filing service; we are here to help you with the part of the business that you have to do, so you can focus on what you love to do.

Alan Conner, MBA – President of My Professional CFO, LLC has nearly 2 decades of experience working with professionals and small business during both the start-up and ongoing management. He has written countless business plans and has managed assets for both institutions and high net worth clients.

Email us with any questions or call us at: 1 (800) 517-0CFO 1 (800) 517-0236

5 Mistakes Most New Physicians Make Regarding Finances

Now that your Internship and Residency are coming to a close, you are now looking forward to being out on your own, doing what you love to do. You are about to reap the rewards, both emotional and financial for the years of hard work you have put in. Right now, before you make any type of financial decisions, realize that the decisions you make right now can have a dramatic impact on a physician’s financial situation for many years to come. If you do not take the proper steps, and file the appropriate paperwork at the scheduled times, you can find yourself paying significantly more in income taxes and also subject to IRS fines and penalties, and heaven forbid tax liens. Take the proper steps now, and start by hiring a physician business manager.

Forming a Corporation

While you can form a corporation online, and obtain you EIN number, most document filing services fall short of completing everything that must be done. You still must have a board meeting, issue shares, and determine your tax treatment. If you are going to form a physician corporation, do it correctly, and do it completely. If you are not sure about what to file, don´t be afraid to use a professional. You will be thankful when it comes to filing your first tax return.

Annual Corporation Filings

The day you form your corporation is only the beginning. You have annual filings that must be made, and you also have a requirement to act like a corporation. Acting like a corporation means you have documented board meetings, and these meetings are held on a regularly scheduled basis. If for some reason you are ever involved in litigation, these are the documents that are requested first, and are regularly used to “pierce the corporate veil.”

Accounting

You cannot be in control of your business if you don’t know what is going on. With bad numbers, or no numbers, you are flying blind, and it happens all of the time. Why? For one thing, it is a common — and disastrous — misconception that an outside accounting firm hired primarily to do the taxes will keep watch over the business. In reality, that is the job of the chief financial officer, so if you don´t want to go back to school to get another degree in Finance or Accounting, don´t be shy in outsourcing these duties.

Tax Planning

You must remember that you are not only a physician, but you are also an employee of your Physician Corporation. This is important in that you are able to utilize your Physician Corporation to pay certain business related expenses, and fund your retirement accounts, prior to actually taking your salary. The net effect of this is a significant reduction in your annual tax bill. You are however, required to pay quarterly withholding taxes, in addition to matching Social Security and Medicare taxes. You may think that you can simply set money aside to cover this at the end of the year, but past experience has shown, this is not something you want to do.

Retirement Funding

As a physician, your retirement planning is more than just saving for the future. It is also the primary means for reducing your tax burden, in addition to a method of sheltering your personal assets from civil judgment. Be certain to take this seriously. You do NOT want to work with someone who is simply selling you products, and has no firsthand experience working with physician pensions. You have many more options than the average broker knows about, so be sure and work with a professional who has done this before, and really specializes in situations such as yours.

Now that we have gone through the various areas to pay close attention to, don´t let them keep you up at night. Each of the items covered above has a very specific procedure to make certain they are done completely and correctly. The main point is that while there are dreadful consequences for failing to take the proper steps, the rewards for actually taking those steps can be extremely rewarding financially. The moral of this is that while you don´t want to overpay for document filing, you do want to work with someone professional – someone who has experience. You also want to seek out someone you can trust to know that they are looking out for your best interests over the long term.

My Professional CFO, LLC, is a Business Management firm providing the highest level of service in three key areas of importance to Independent Contractor Physicians, Small Business Owners and Entrepreneurs.

We specialize in Corporation filings and ongoing Compliance, Accounting and Payroll, and Investment Management. Our professionals will assist you in forming the appropriate type of company for your situation and work with you to make sure your company remains compliant. We provide ongoing Accounting and Payroll services to make certain all bills are paid and necessary tax forms and withholding payments are made in a timely manner, as well as the set up and management of your retirement accounts.

We are not simply a document filing service; we are here to help you with the part of the business that you have to do, so you can focus on what you love to do.

Alan Conner, MBA – President of My Professional CFO, LLC has nearly 2 decades of experience working with professionals and small business during both the start-up and ongoing management. He has written countless business plans and has managed assets for both institutions and high net worth clients.

Email us with any questions or call us at: 1-800-517-0CFO (1-800-517-0236)

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