Advertisement
YOU ARE HERE: LAT HomeCollectionsBusiness

Advice: Online document-filing firms are a tool, not a solution

Also: Look into dissolving S corporation to avoid paying the state tax.

November 29, 2010|By Karen E. Klein

Dear Karen: My business was incorporated by an online service on the last day taxes were due for the year. Had it waited one more day, I could have saved $800.

Answer: Your experience shows that dates matter when it comes to filing legal documents. And, although online services can be convenient and inexpensive, it is incumbent on the entrepreneur to research details or hire a professional to help.

"Online formation companies are very good at getting the documents prepared and filed with the secretary of state," said Deborah Sweeney, chief executive of MyCorporation in Calabasas.

"A reputable online provider can certainly undertake the state filings, as well as obtain your business EIN [employer identification number], file your annual report and provide you with sample corporate paperwork, but they may not completely take the place of a competent attorney and accountant," she said.

• Find out whether firm was dissolved

Dear Karen: I sold my S-corporation last year and will get payments for the next three years. Am I required to continue paying the annual $800 state tax?

Answer: Until you formally dissolve the corporation, you'll probably be on the hook for the $800, said Bob Jensen, a CPA with King, King, Alleman & Jensen in Burbank.

You may be able to dissolve the corporation, an easy process, depending on how your sale was structured. Ask your accountant or broker whether you sold the corporation's stock or its assets. The answer will help determine whether you have to keep the corporation alive and paying, Jensen said.

Small-business questions? E-mail Karen at smallbiz@latimes.com

Advertisement
Los Angeles Times Articles
|
|
|