Need Another Entity to Protect Your Business or Assets by the end of 2014 or beginning of 2015? Time is running out.

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I hope you have had a successful year in business. If you didn’t reach all your goals this year, we hope that 2015 will be much more prosperous for you! There are steps you can take NOW to make sure that happens.

January is right around the corner – a time when many traditionally revisit their goals and priorities for the year ahead. One of NCP’s most important new year goals is to help you be more proactive in launching that profitable new business initiative or creating better protection for your assets.

We’ve found a solution that will help you feel more confident going into 2015 by establishing a complete foundation for your business and personal assets like real estate or investments. The best part is that takes less than 30 minutes of your time!

If you’re looking to form an LLC (most popular) or corporation (no matter what state) , December is the best time to get this done. Waiting until January can be the most risky and costly approach – here’s why;

• If you wait until 2015, by the time the entity is filed and everything is in place, more than likely you will be operating as a schedule C for two to three weeks of the beginning of the year (assuming you are operating a new business, real estate is different).

• You are risking an audit! There is a $300 Billion tax gap and the #1 culprit is sole proprietors that file a schedule C (that’s why we want to help you avoid that track in 2015, or at least be on it for the shortest possible time).

• We realize that most incorporating services say they incorporate in 24 hours (which may be true but there are additional steps required to establish you business with EIN, banking and more by the first of the year and they all take time. Some states are very backed up with filing and it may take from 5-12 business days up to several weeks for them to process everything.

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Don’t Take My Word For It

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Anytime you’re visiting unfamiliar territory, it always helps to get travel tips from someone who’s made the trip before you – someone who knows the wrong turns to avoid and how it feels to be a newcomer.

Meet Kevin and Melissa Knecht – a husband and wife entrepreneurial team wrapping up one of their most successful and abundant years ever!

Click here to watch their video: http://budurl.com/WhyLaunchWithNCP
 

How did they do it? Kevin and Melissa are happy to share their secrets with anyone who’s ready to take their business success to the next level. Certainly they already had the desire, determination and a clear vision of their destination.

What they were missing was a complete business foundation that could multiply and protect their profits. After some heavy comparison shopping for someone to walk them through the process of forming a corporation or LLC, they decided that NCP was the best value.

Sure, we could go on about the comprehensive process we took them through – but no one can explain what this experience did for their confidence and earning power better than Kevin and Melissa. They share the important highlights in this quick video.

If you’re ready to put your business on a powerful new success trajectory in 2014 like Kevin and Melissa did, NCP is ready to help! You’ll be amazed how fast, complete and affordable our system is. Take the next step and call us today at 1 (888) 627-7007 or (702) 367-7373.

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Entity Structuring Fundamentals

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Anytime you form a separate legal entity for a business or to protect safe assets, it is very important to complete the entity structuring fundamentals.

When an entity is formed you should be very clear on the structure that is best to support your goals, both short- and long-term. For example, a C corporation may have lower tax brackets than you or I do personally AND you may pay fewer taxes in year one, but it may be the WRONG structure for your results in year 2, 3, 4 and so forth. If you are not looking to retain earnings in the company and grow and expand with infrastructure and overhead, it may likely be the wrong entity for your business. If you are forming an LLC, you should know how the LLC is taxed and if it is managed by managers or by members. There is a big difference, especially with how the LLC is taxed. In order to select the best entity, keep in mind that you must approach it from two main points of view: what is the best entity from a tax point of view and what is the best one from a legal point of view.

After you are clear on your goals both short- and long-term, it is time to form the entity. You want to be clear on who is the initial director if a corporation or manager/member, if an LLC. After formation of the articles of organization or articles of incorporation (for a corporation), your next step is to open a bank account and capitalize the new entity. This seems simple, but there are so many people that open an LLC bank account with a check with revenue and never properly have the owners capitalize, put money into the account, in exchange of ownership in the company. If you are the owner of the entity, you should be the one putting money (or service or equipment) into the company in exchange for ownership interest. If you have another entity that is the owner, that entity would put money into the operating company in exchange for an ownership interest. If you have a partner and you are not each going to put in capital to match your ownership percentage and one is going to contribute services, that may be a taxable event (check with your CPA). In other words, if you get a 50% ownership in a business with no money in exchange for your labor (sweat equity) and your partner puts in $50K for their 50% ownership, the IRS looks at this as if you obtained $50K in value and would owe taxes on the $50K. In that situation, are you able to say of the $50K, $45K was a loan and therefore if your partner put in $5K also, then there is no tax issue. That is correct, but now you have a totally new situation where the business will need to pay back the $45K loan out of profits before either partner is paid any profits.

Next you have to make sure that if you were operating as a sole proprietorship before or a general partnership now, that when you form the entity you actually make a complete transition to that new entity. Over the years I have seen too many people that are still operating as a sole proprietorship, even though they have formed an LLC. How is this possible? Several mistakes are when you don’t open a new bank account in the name of the LLC or corporation and keep operating under the bank account in your name as a sole proprietorship. The other big issue is if you have a DBA or fictitious firm name linked to you personally and you form the separate legal entity and forget to reconnect the DBA name to the NEW entity – that is a big mistake.

Corporate and LLC formalities are a must (even if you incorporate in Nevada). A corporation and an LLC are separate legal entities from you and I personally. They can do everything you can do except act and think. They do that through minutes, meetings and resolutions. This is the documentation for major decisions made by an entity such as adding a shareholder, changing the officers or managers, leasing real estate…Some falsely believe that LLCs are “easier” because they do NOT require the same formalities as corporations. When we did our research years ago with looking at what judges actually do, we found they expect to see the same corporate formalities that apply to corporations. That means an LLC will need an operating agreement, minutes, meetings and resolutions for major decisions, membership certificates and a membership ledger to track the owners. This is all part of protecting both the LLC and corporate veil. If someone is going to sue your entity and you do not operate it as such a legal entity, then you MAY be personally liable. Managemyminutes.com is a great resource for online software to help walk you through the minutes and meetings required.

The final big step to make sure your entity is structured properly is to make sure your taxes are being paid properly. That starts with knowing how your entity is taxed and the responsibilities with that. If the entity is an LLC taxed as an S corporation, at some point in the year you will probably have some type of payroll required, even if just to pay yourself. If you have an LLC taxed as a partnership you will realize if you are one of the members of the LLC, you will not be paid a salary. You may be paid what is called a “guaranteed payment,” which is similar to, but not a W-2. It is very important to make sure that you work with a good tax team to keep you on track with your business entity.

Making sure your entity is in compliance is a very important step in the process to build and protect your wealth! Take the time to create an action step or two so you keep moving forward in your business and towards success!

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How to Establish a U.S. Business Bank Account

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If you’re not a U.S. resident, opening a U.S. bank account for your U.S. business entity can be a challenging task. We’ve covered the many advantages of having a U.S. entity in past articles, but once you’ve cleared that hurdle, the next big step in establishing trust with U.S. buyers is having a credible physical presence for your business inside the United States.

While there may be a few exceptions on certain high demand items, U.S. consumers will generally feel safer choosing an online seller that appears to be based inside the U.S. before they’ll buy overseas. This awareness and the huge rise in U.S. online sales has created a dramatic increase in the number of foreign marketers establishing a U.S. LLC or Corporation.

Here are the critical elements of a credible U.S. business presence:

  1. A U.S. LLC or corporation (compliance and tax advantages) Nevada is a preferred state.
  2. A physical U.S. office address (consumer trust and banking credibility)
  3. A U.S. bank account (payment processing and merchant fee advantages)

Whether you think of them as legs on a stool or spokes in a wheel, it’s immediately apparent that having all three securely in place will send a much stronger marketing message and give your U.S. income stream a lot more stability. It’s relatively easy to form a corporation and obtain the requisite “EIN” number without being physically present in the U.S. but opening a U.S. bank account from outside the country is nearly impossible. U.S. banks have a fiduciary responsibility to know the client AND to have met with them BEFORE opening a U.S. account.

Here’s what banks require from non-residents to open a U.S. account (some requirements will change slightly from bank to bank):

  1. Articles for the U.S. entity or the name of the sole proprietorship or general partnership
  2. EIN (Employer Identification Number) for the business (obtained though the IRS)
  3. Lease agreement for a physical office address (highly preferred over a P.O. box)
  4. Your business address in your home country
  5. Color copies of passport and driver’s licenses for all persons on the account
  6. Reference letter from a bank officer in your home country verifying the following:
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