Providing Delaware incorporation information and general business news you need to know now.
Are you self-employed and looking to start a Solo 401(k) retirement plan for the future? 401(k) plans let participants save and invest a portion of their earnings before taxes are taken out. No taxes are paid on the money until it is withdrawn, usually at retirement when the worker’s tax bracket is lower.
If you are an independent contractor, consultant, freelancer, real estate agent, or other self-employed person, the government offers an annual $53,000 tax break that could help secure your retirement. For this Solo 401(k) plan, the business owner wears two hats, employee and employer. Contributions can be made for both, resulting in very high contribution limits. The benefit is even more for married business owners because spouses are the exception to the “solo” or “one worker” rule and can make contributions equal to those of the owner. Using this advantage married couples could put away $106,000 annually, tax-deferred. Solo-k plans are best suited for self-employed workers who want to save as much as possible for retirement, and who make enough to make significant contributions. If, however, the plan is to grow the company and hire employees, it would have to be converted to a full-blown 401(k) plan.
To qualify for a Solo-k an individual must be able to claim self-employed income, but have no full-time employees (except a spouse). However, a person does not need to work full-time in the self-employed capacity. Many times an individual works for an employer, but has another business on the side, making that business eligible for adopting a Solo 401(k). The plan can be adopted by any self-employed business, including a sole proprietorship, limited liability company, partnership, S-Corporation, C-Corporation, etc.
The two basic types of this plan are self-directed, and brokerage based. The brokerage based plans invest in stocks and mutual funds, while the self-directed plans allow the entrepreneur to use retirement funds to make virtually any type of investment on their own. The IRS describes only the types of investments which are prohibited, which are few. Varied options such as real estate, private business investments, precious metals, and loans give the holder many options.
Another advantage of the Solo-k is that it allows a business owner to take out a loan on the retirement account. A participant is allowed to borrow up to 50% of the total value, or $50,000, whichever is less. This loan is tax free and can be used for any reason. (Failure to make payments back can result in taxes and IRS penalties, however.)
There is an additional feature for those 50 years old and over. They can contribute an additional $6,000 beginning this year, often referred to as a “catch-up” feature. So the upper limit in 2015 for a business owner over 50 would be $59,000.
Many people are unaware of this Solo-k plan which allows for self-employed workers to invest a good amount of tax-deferred income, with less hassle to set up than many other retirement plans. It beats traditional corporate 401(k)s in higher savings limits and in the ability to invest in a variety of options.
At Harvard Business Services we feel this would be a great fit for a large portion of our clients. We have formed a Strategic Relationship with Provident Trust Group to assist with the setting up of a Solo 401K, reach out to them directly at 855 279 5981 with any questions.
By now most people know that Delaware is recognized around the globe as the place to incorporate your company and that the Delaware LLC is amongst the most popular business structures out there today, with its unmatched flexibility, asset protection, and low maintenance costs. At Harvard Business Services, we work with clients from across the US and all over the world who choose Delaware to form their LLC. Roughly 16% of our business now comes from clients outside the USA.
The question is “Who can be a member of a Delaware LLC?” Are there any restrictions on the membership of a Delaware LLC? I can’t tell you how many times we get these questions from our clients. The truth of the matter is, anyone in the world can be a member of a Delaware LLC or corporation. Generally, the members of an LLC are individuals, but it doesn’t stop there. Many clients will opt to set up the Delaware LLC with another company as the member. That can be a corporation, LP, or even another Delaware LLC. Often, clients will set the LLC up with an LLC as the member, and additional persons as members. Any mix is permissible. If for any reason the members of the LLC change in the future, not to worry, this is all handled internally with the LLC operating agreement.
Traditionally, Delaware LLCs are filed without listing the name and address of the member(s) for public record, since it’s not required when filing the certificate of formation in the state of Delaware. This means any changes, from adding/removing members, changing the ownership structure, who’s in charge, who manages day to day activities, etc., is all addressed within the LLC operating agreement.
If you have any questions about membership or forming your Delaware LLC, please call, email, Skype, or live chat from our website (www.delawareinc.com) during working hours. We’re always here to help!
H.J. Heinz Company and Kraft Foods Group, Inc. both Delaware Companies signed a definitive merger agreement to create The Kraft Heinz Company.
H.J. Heinz Company was founded by Henry John Heinz in 1869 in Sharpsburg, PA and is now headquartered in Pittsburgh, PA. It is one of the world’s leading marketers and producers of healthy, convenient and affordable foods specializing in ketchup, sauces, meals, soups, snacks and infant nutrition. Heinz enjoys the number 1 and number 2 market share in more than 50 countries and sells 650 million bottles of its iconic ketchup every year.
Kraft Foods Group was founded in 2012 and is a consumer packaged food and Beverage Company with annual revenues of more than $18 billion. The company manufactures and markets food and beverage products including refrigerated meals, refreshment beverages, coffee, cheese, and other grocery products, primarily in the U.S. and Canada, under a host of brands.
This merger will create the third largest food and Beverage Company in North America. Under the terms of the agreement which has been approved by both company’s shareholders, Kraft’s current shareholders will own a 49% stake in the combined company, and current Heinz shareholders will own 51% on a fully diluted basis.
Kraft shareholders will receive stock in the combined company and a special cash dividend of $16.50 per share. The aggregate special dividend payment of approximately $10 billion is being fully funded by an equity contribution by Berkshire Hathaway and 3G Capital.
This creates a substantial value for Kraft shareholders as the special cash dividend payment represents 27% of Kraft’s closing price and will allow Kraft shareholders the opportunity to participate in the new company’s long-term value creation potential.
The combination of these iconic food companies together with the new company will have eight $1+billion brands and five brands between $500 million and $1 billion.
The new company The Kraft Heinz Company will be co-headquartered in Pittsburgh, PA and Chicago, IL. For more information on this iconic merger between two Delaware companies click here to read the full article.
Because Delaware is known for having the strongest corporate law structure, we get clients from all over the world looking to form a Delaware LLC. The first question we get is whether it is possible to form a Delaware LLC when not physically in Delaware. The answer is yes. All you need is a Delaware Registered Agent. Clients often contact Harvard Business Services to form their company and act as their registered agent because our service fee is just $50 per year and guaranteed never to increase.
Keep in mind that your Delaware LLC is a “domestic company” in Delaware and a “foreign company” in every other state. When operating in Alaska, often clients will register there as a foreign company doing business in Alaska. This is the process in which Alaska gives you permission to operate there with a Delaware LLC. The “foreign qualification process” enables a company to transact business in a jurisdiction other than where it was formed.
Alaska, like most states, has a state fee and an application process. Generally clients will work with their registered agent to file the documents necessary to get the approval from the Alaska Secretary of State’s office. Harvard Business Services can obtain the approval for an Alaska foreign qualification in about 2 business days.
Alaska does not require a Certificate of Good Standing from Delaware in order to register there as a foreign entity. They do require that you have a registered agent address in Alaska. This must be an Alaska physical address where the state can send legal documents, notices, and service of process. If you would like to use Harvard Business Services as your agent in Alaska, the cost is $99 per year year.
One way that Alaska differs from other states during this process: Alaska will require to know the information of all members owning a 5% or more stake in the company including the percentage of ownership. They will also require a signature from an authorized person. Once registered as a foreign entity in Alaska, an initial report is due within six months. There is no filing fee for this report. Alaska also has a biennial report that is due on Jan. 2 on either odd or even years depending on the year that the business was registered in Alaska. This report carries a fee of two hundred dollars.
If you have a Delaware LLC operating in Alaska, Harvard Business Services would be happy to assist with the Alaska foreign qualification. If you would like to order this service, or have questions answered about this process please call, email, Skype, or live chat during working hours.
If you have a Delaware Limited Liability Company (LLC) and/or Limited Partnership (LP), then you know one of the requirements is paying the annual franchise tax fee. As a reminder, every LLC/LP formed in the state of Delaware is required to pay an annual franchise tax fee by June 1 of each year. This year, the flat fee rate is $300 per entity. The previous amount was $250; however, the state of Delaware passed legislation last year increasing the minimum amount due.
You may be wondering if you actually owe the annual franchise tax fee. Well if your LLC/LP entity was in existence as of December 31, 2014, then the 2014 franchise tax fees will be due by June 1, 2015. The state of Delaware assesses the franchise tax fees on every LLC/LP regardless if the entity conducted any business, had any activity and reported any profit or loss, etc. Basically simply because you have an LLC/LP registered in the state of Delaware, you have to pay the annual franchise tax fee.
We recently mailed the state of Delaware official franchise tax notices to all of our LLC/LP clients. You may be concerned why you received a tax notice if you have already made payment arrangements. Typically, it comes down to a timing issue. The state of Delaware printed the office tax notices several weeks ago and then they sent them to us. We in turn, had to get them organized and ready for mailing to you as the direct client. There are literally thousands and thousands of annual reports to be sorted, stuffed into envelopes, affixed with postage and finally picked up for mailing. The whole process is labor intensive and can take a couple of weeks to complete. So you may have made your payment arrangements during this processing time. No worries, if you have already paid, and you happen to receive another notice, it is simply a cross in the mail. It does not mean you have to pay the franchise tax again, as only one payment is required per year.
If you have not yet paid, then you can utilize our services to assist with the process. To initiate the service, you will just need the name of your LLC/LP and the state of Delaware file number. Then go to our website at: www.delawareinc.com/payft and enter the requested information. Once we have received your order, we will file with the state of Delaware to ensure that your entity is in compliance with its franchise tax fees.
If you have any questions, just let us know. The franchise tax department can be reached via email at: firstname.lastname@example.org. Or via telephone at 1-800-345-2677, extension 6901.