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The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.

Registered Agent for Foreign Qualification
By Brett Melson Tuesday, January 19, 2016

registered agent for foreign qualificationThe state of Delaware is world-renowned by international investors, entrepreneurs, start-up titans, venture capitalists, lawyers, accountants, real estate investors and business owners for the strength of its corporate laws, the consistency of its Court of Chancery’s business decisions and the ease of operating and maintaining business entities.

 

In fact, the state of Delaware consists of more corporate entities (1,181,000 as of Dec 31, 2015) than human residents.

 

The state of Delaware’s administration works diligently to ensure that Delaware maintains its reputation as “The Incorporation Capital” in order to attract new company formations from all over the world. Here at Harvard Business Services, Inc., most of the new business formations formed by clients within the United States comes from states other than Delaware, which automatically necessitates the local compliance matter called Foreign Qualification.

 

The Foreign Qualification process allows a Delaware company to be governed under the Delaware Corporate Law Structure but still operate locally in another state. When a business owner files Foreign Qualification for a company doing business in another state, he/she must retain a Registered Agent in that state.

 

While we are primarily known as the leading Registered Agent in Delaware, we also offer Registered Agent service in any state in the nation at a very low, competitive rate of $99 per company.    

 

In fact, we can also form companies in any state in the nation. If you need to form an LLC in California, a close corporation in Wyoming, a non-profit corporation in Delaware, a limited partnership in Massachusetts or a public benefit corporation in Maryland, we can assist with any business formation in any state in the country.

 

Thus we can guide you through the creation of your new business entity and act as your Registered Agent for the life of all your companies. We have assisted clients with business formations in every state in America, including Alaska and Hawaii.   

 

The Registered Agent plays a crucial role in keeping your company compliant and in good standing, which is why it is so important to have an experienced Registered Agent who has a knowledgeable, reliable customer support staff available to answer your questions.

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Filing a Delaware Corporation Franchise Tax Report
By Amy Fountain Monday, January 18, 2016

Delaware corporation Franchise Tax reportHarvard Business Services, Inc. has a long history of assisting companies with completing and filing their annual Franchise Tax reports with the state of Delaware.

 

Even if we are not your company’s Registered Agent, we are still happy to provide you with our expert Franchise Tax filing service, and we will ensure your annual report filing is free of errors. 

 

In our experience, here are some guidelines on how to make sure your Franchise Tax report is completed accurately:

 

  1. Principal Place of Business: this is where your business is primarily located; the address does not have to be in Delaware—it can be anywhere in the world. However, it must be a physical address, not a Post Office box. Moreover, you cannot list the address of Harvard Business Services, Inc. as your company’s principal place of business (even if you utilize our Mail Forwarding service). Remember, if your business is based entirely online, you still must provide a physical address at which your company receives mail. You must provide a Principal Place of Business on your Franchise Tax report.

 

  1. Directors Information: you must indicate the Directors that are elected to your Board of Directors as of the date of the report filing.  Each Director’s name and physical address must be provided. The address can be that of the company or the personal address of the Director. Again, the address cannot be a Post Office box—it must be a physical street address.

 

  1. Officer Information: you only need to provide the name and address of one officer, regardless of how many officers may be elected within your company. Typically, an Officer title is President, Vice-President, Treasurer, Secretary, CEO or CFO. 

 

  1. Authorization and Signature: your annual Franchise Tax report must be authorized and signed by one of the persons listed in the Director and/or officer Sections. For example, if an annual report lists Holly White as a Director and Rachel Black as the President, then Mary Green is not authorized to file and sign the annual report as Secretary, since she was not listed. Holly White and Rachel Black are the only people allowed to sign the franchise tax report.

 

If your company has over 5,000 total authorized shares, you may be required to provide additional internal information, such as the total number of issued shares as of the date of the Franchise Tax report filing.

franchise tax report for delaware

This does not mean the number of shares you may have issued in the current year, but rather the total number of shares the company has outstanding.

 

The number of issued shares information can typically be found in the company’s stock transfer ledger.

 

In addition, you will need to provide the total gross assets of your company, as reported on the entity’s federal income tax return.

 

This does not mean the profit or loss of the company but specifically those assets stated on the federal income tax return (page 1 and Schedule L). The state of Delaware has the authority to request a copy of the tax return for verification purposes.

 

When you are ready to proceed with your annual Franchise Tax filing, please visit our website at:  www.delawareinc.com/payft

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The Fastest Way to Get a Tax ID Number Online
By Brett Melson Monday, January 11, 2016

the fastest way to get a tax id number onlineThe first step to creating a new company is the actual company formation. The formation of a new business entity is the foundation upon which everything else is built—imagine it is the birth certificate for a company.

 

The next step is for you to apply for a Federal Tax ID Number from the IRS.

 

This Federal Tax ID Number (also referred to as an EIN) is necessary for every business that intends to operate in the United States; open a U.S. bank account, hire employees in the United States; work with other U.S. businesses; and, of course, file tax returns with the IRS.

 

Many people are under the impression that if the responsible party for the corporation or LLC has a U.S. address and valid Social Security Number (or Individual Taxpayer Identification Number ) then they will be able to easily obtain a Tax Identification Number online with the IRS.

 

Although this can sometimes be the case, there are several variables that can drastically delay Tax ID Number applications at the IRS.

 

When new business owners apply online for a Federal Tax ID Number with the IRS, it is not unusual for the following message to appear: “We apologize for the inconvenience, but based on the information provided, we are unable to provide you with an EIN through this online assistant.”

 

When this occurs, the application needs to be faxed or emailed to the IRS, and you must then wait 10-14 days for the IRS to issue your new Tax ID Number.  

 

Some of the triggers that cause this error message are:

  • A foreign address is listed on the EIN application.

 

  • If the responsible party is a business with an EIN previously obtained through the IRS online portal. Companies that have an EIN number that starts with 20, 26, 27, 45, 46 or 47 can identify their EIN as a number issued online via the IRS.

 

  • A foreign individual is listed as the responsible party of the application.

 

  • In our specialist’s experience, 99% of applications with an individual ITIN on line number 7B require additional documents in order to process the application. The IRS will then require confirmation as well, such as the ITIN card or letter, to proceed.

 

  • There was a previous company already formed in the same state, with the same company name and same responsible party, which never cancelled its EIN (by writing a letter to the IRS to terminate the EIN number).

 

fast way to get EIN online

Dealing with the IRS yourself can be frustrating. Sometimes, phoning the IRS help line with a simple question is preceded by a one-to-two-hour wait time.

 

Due to the demand for new tax numbers and too few customer service personnel at the IRS, people all over the world have turned to us for assistance obtaining a Federal Tax ID Number online.

 

In the last two years, Harvard’s EIN specialist has helped over 7,000 companies obtain Tax ID Numbers. She is an expert and has the process down to a science.

 

Twenty-five percent of the EIN’s we obtain are for international clients without Social Security Numbers. Contact us at 1-800-345-2677 for the easiest way to obtain your Federal Tax ID Number online, quickly and easily.

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Business Resources for Women
By Meri Weiss Tuesday, January 5, 2016

business resources for women

 

Two steps forward, one step back: this adage can describe most social, political, economic, educational and business advances by women. In 2015, women once again have taken steps forward—this time in the business world, as evidenced by the increase in the number of female-owned businesses in America. However, along with the good news comes disappointing news: women do not own nearly as many companies as men do in this country.

 

According to the Center for Venture Research, in 2014, only 26% of angel investors in the United States were women, and only 8% were minorities. While women own plenty of businesses, the majority of these businesses do not have employees, so the effect is minimal.

 

According to the United States Census Bureau’s Survey of Business Owners (which is given every five years), women-owned companies comprised only 5% of the sales of American companies in 2012. While that’s the highest this percentage has been in many years, well, 5% is not very high.

 

Female-owned businesses generated 6.4 percent of overall employment in 2002 and 2007; that number was up to 7.8 percent in 2012. The revenues of female-owned companies follow a similar trajectory—3.7 percent in 2002, 3.5 percent in 2007 and an increase to 4.2 in 2012. Each category of the survey indicates small increases such as these, which of course is good news but also a bit frustrating and disheartening.

 

Here at Harvard Business Services, Inc., we want to do all we can to encourage women entrepreneurs to start businesses, buy businesses, sell businesses, flip businesses and mentor other women in the business world, so we have created a Business Resources for Women blog series; a few times a year, we will publish as many resources for women in business as we can find. Together, perhaps, we can change this unsatisfactory circumstance.

 

Pipeline Angels

 

Pipeline Angels is a group of new and seasoned women investors who create capital for female social entrepreneurs. The organization holds a boot camp for new investors as well as a signature pitch summit for start-ups looking for funding. Over 180 women entrepreneurs have graduated from the boot camp; over 20 companies have secured funding; and members of Pipeline Angels have invested over 1.7 million dollars in women-led, for-profit social ventures.

 

The founder & CEO is Natalia Oberti Noguera, and the Board of Directors reads like a Who’s Who of the angel investing and start-up worlds. The list of mentors is pretty impressive, too. This organization seems to embody the notion of women helping women.

 

National Women’s Business Council

 

The first sentence you see on this website is “Women-owned businesses only receive 4.2% of venture capital,” followed by the challenge “#change the time.” Pretty audacious for a government-funded organization. The NWBC is a “non-partisan federal advisory council created to serve as an independent source of advice and counsel to the President, Congress and the U.S. Small Business Administration on economic issues of importance to women business owners.”

 

Its members are prominent female business owners and leaders of women’s business organizations. The Council is comprised of 15 members with three-year terms, and the Chair is appointed by the President of the United States. Eight members are business owners or CEOs; half of those share the political party of the President and the other half do not. Six members are representatives of national women’s business organizations, such as Astia, National Organization for Women Business Owners and Women’s Business Enterprise National Council.

 

The mission of the NWBC is to “conduct research on issues important to women business owners and their organizations,” communicate said research; and subsequently supply a platform for the expansion and improvement of opportunities for female business owners. The site offers Research Reports, Annual Reports, Fact Sheets, a blog and an Events list.

 

Golden Seeds

 

Golden Seeds has been promoting female business leaders since 2005. The organization has over 275 members who invest, along with the company’s venture funds, in women-led enterprises. Thus far, Golden Seeds has invested over 70 million dollars in over 65 companies. The types of companies run the gamut: tech, pharma, life sciences, e-commerce and social media.

 

A three-person Management Committee oversees Golden Seeds, which has a corporate presence in New York City, Boston, Silicon Valley and Texas. The company invests in businesses with women in A-, B- and C-level positions; in fact, a woman must own a large portion of the company’s equity in order to elicit the interest of Golden Seeds, which owns four venture funds that invest in the companies.

 

Golden Seeds also offers a Knowledge Institute that holds classes, such as “Angel Investing 101: An Introduction to Angel Investing” and “Angel Investing 301: Landing a Deal” for members, as well as prospective members; the classes are meant to “support [their] mission to pursue above market returns through the empowerment of women entrepreneurs and the people who invest in them.” If you are seeking financial capital for your female-led company, or you are an investor who would like to support women-run companies, Golden Seeds could be the answer you’ve been searching for.

 

Astia

 

Astia was “founded in Silicon Valley in 1999 as a non-profit dedicated to identifying and promoting best-in-class women and high-growth entrepreneurs.” It is a global company with offices in London, San Francisco and New York. The Astia team includes serial entrepreneurs, angel investors, venture capitalists, corporate leaders, accountants, lawyers and bankers.

 

This is a multi-stage investment program that picks ventures with strong potential; it finds investment-ready companies with women in leadership positions and gives them access to capital and resources. Astia’s mission is explained in detail in The Astia White Paper.

 

Angel Resource Institute at Willamette University

 

According to its website, “The Angel Resource Institute (ARI) is a charitable organization devoted to providing education and information on best practices in the field of angel investing. The programs of ARI include educational workshops and seminars, research projects and reports, and information about angel investing for the general public.

 

Our programs are available to investors, entrepreneurs, policy makers, entrepreneurial support professionals, and many others interested in early-stage capital.” ARI was founded in 2006 as part of the efforts of the distinguished Ewing Marion Kauffman Foundation to support angel investing.

 

Originally the organization focused on education and training in regard to best practices in angel investing; however, the organization has expanded its efforts to include research, mentoring and leadership initiatives. It partners with Global Entrepreneurship Week and the Ewing Marion Kauffman Foundation.

 

Women First is an offshoot of the Angel Resource Institute.  It offers “training and educational programs, mentoring, and other activities [in order] to materially increase the number of women and minorities as successful entrepreneurs and investors.” They offer angel investing courses and due diligence courses as well as other investment-related classes.

 

Chic CEO is an online resource for female entrepreneurs that delivers business information and tools to women building their own companies, as well as a community of like-minded women. Stephanie Burns, the founder and CEO, has put together an impressive Advisory Board and Brain Trust whose goal is to bring together and assist women who don’t know how to implement their business ideas or are scared to do so.

 

Chic CEO, which caters to 50,000 subscribers, has been named one of the Top 10 Entrepreneurial Websites for Women by FORBES Magazine. There are business plan templates available to download, links to podcasts and a variety of other business-related paperwork you might need when starting your own company.

 

Watermark is a Bay Area organization, founded in 1993, that aims to increase the representation of women in leadership roles. Watermark hosts over 50 events a year, including the Watermark Conference for Women Silicon Valley (Hillary Rodham Clinton gave the 2015 Keynote Address), the Innovation Conference and the Entrepreneur Conference.

 

Watermark offers Leadership Development Programs to sponsors; it has recently introduced a Waterman Index to “honor publicly-traded Bay Area-based companies with 30 percent or more of the companies’ governing boards and top-five compensated executive positions held by women.” The purpose of the Index, which pulls its information from the 2015-16 UC Davis Study of California Women Business Leaders, is to highlight gender diversity issues and identify the companies that have helped to close the gap.

 

There are three different levels of membership in Watermark, but all of them require a certain level of professional success. Watermark also offers a blog, a webinar series and a few different speaking series.

 

Women@work, a program on Business Radio Powered by the Wharton School, is a weekly talk show that covers topics relating to how women can “join, stay, succeed and lead” in the professional work arena. Hosted by Laura Zarrow, the show features accomplished women from the worlds of business, academia and books, many of them University of Pennsylvania alumna.

 

Women 2.0, founded in 2006, seeks to “strengthen technology businesses by connecting, inspiring and educating the next generation of technology leaders.” It offers a blog network where female “founders, investors and innovators” can share information, such as their start-up experiences, suggestions and advice.

 

Women 2.0 also hosts two conferences a year that highlight trends and stories in the world of disruptive innovation. PITCH is a bi-annual competition that offers early-stage female entrepreneurs from all over the world access to funding and accelerators. The website also offers a heap of articles, categorized by Life, Influencer Network, Start-Ups and Technology.

 

Women Veterans Connect exists to help “bridge the gap between women veterans and their communities by providing interpersonal connections, along with educational and life skills services.” The organization undertakes outreach projects and peer mentoring, and the website hosts an aggregate of #womenvetconnect Tweets. 

 

Springboard 2000 Enterprises is a non-profit organization wholly focused on increasing female entrepreneurs’ access to equity markets. “The organization recruits, educates, showcases and supports women-led high-growth businesses as they seek venture capital and grow.” Some of Springboard’s previous collaborators are Harvard, MIT, Columbia University, the Kauffman Foundation, Microsoft and The Paley Center for Media; its list of strategic partners is long and impressive, including Astia, Partnership for New York City, Belle Capital USA, WE Summit and CoFoundersLab.

 

According to the Springboard Manifesto, the organization stands for Global leadership, economic impact, role models and a better future. Since the year 2000, Springboard has raised over 6.8 billion dollars in equity, grants and strategic investments for 500 companies, 11 of which have filed IPOs and 157 of which have either merged with or been acquired by other companies.

 

The industries in which Springboards invests vary: Biotech/Healthcare; Software/IT Services; Media/Entertainment; Business Products & Services; Consumer Products & Services; Telecommunications; Financial Services; and Retail. A comprehensive list of companies the organization has invested in can be found on the website.

 

Programs that introduce women entrepreneurs to alliances and partnerships comprise the core of Springboard’s objective; indeed, the number, variety and geographical locations of the programs border on remarkable; there are Accelerator Programs, Dolphin Tank Sessions, Caucus Programs, Fashion Tech Lab, Health Innovation Hub, Winners’ Circle Award Dinners, Build It Big and Educational Programs all over the country, not to mention a new SBE Australia chapter. If you own a high growth, woman-led business, Springboard seems to be the perfect source of equity capital for you.  

 

If you just want to borrow money without any mentorship or interference in how you run your business, you might consider the Business Loans Guide on the Consumer Affairs website.

 

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Lewes Unleashed Dog Park
By Michael Bell Monday, January 4, 2016

HBS Donations

Harvard Business Services, Inc. has been headquartered in Lewes, Delaware since 1990, and as a member of a small-town community, we enjoy giving back to our community and 501(c) organizations. This year, along with many other local organizations, we donated to the new Lewes Dog Park. The forthcoming dog park will be a 4.5 acre off-leash, fully-enclosed dog park which will provide local dog owners with unlimited use of the park, walking trails and open fields. Sheltered, shady areas with benches will allow pets and people to socialize. The Lewes Dog Park is scheduled to open during the spring of 2016, and we are so excited to take our dogs for romps in Lewes.

If you would like to make a donation to help fund the Lewes Dog Park, you can do so here.

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