The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.
As a filing specialist here at Harvard Business Services, Inc., I talk with people every day who have multiple companies incorporated in the state of Delaware, or even multiple Registered Agents and are looking for a more cost effective service. To be more specific, recently I spoke with a gentleman who was inquiring about Harvard Business Services, Inc. and what we have to offer. Over the past few weeks, he had received Registered Agent renewal bills for his Delaware entities from other agents. Reluctant to pay them, because they were so outrageously high, he found our website.
He agreed that our website was more than helpful but wanted to speak with a representative to get a feel of what and who we are as a company. More or less, he wanted to feel confident that our service matched or exceeded that of his current agent being that our annual fee was a fraction of what he had been paying. As we continued our conversation, he expressed concern about the hefty fees and due dates on the renewal bills he had received from other agents and asked if there was enough time to make the switch to Harvard without liability for paying the other agents. We made the switch easy for him.
In what was less than a five minute phone call, I was able to guide our new client through the process of submitting the requests to switch agents to Harvard for his multiple entities as he effortlessly navigated our website. Before I thanked him for his business, I was able to confirm receipt of his orders and advise him that the amendment filings would be submitted to the state of Delaware before our office closed that day. I could sense the appreciation in his tone as I further explained that he could toss those bills in the trash and be assured that the state of Delaware will officially notify his previous agent of the change before the due date of his invoices.
Do you have a similar situation and are looking to avoid that large annual fee for Delaware registered agent service? We offer a simple solution even if your due date for renewal is right around the corner with your current agent. You will be surprised at how easy and fast it is to make the switch using our hassle-free service.
At Harvard we work diligently and process all requests within 24 hours. This means your filing order will be submitted to the state of Delaware via our on-line connection without delay.
Gaining the trust and confidence of our clients is how we conduct business each and every day at Harvard Business Services. To change your Delaware agent to Harvard Business Services, Inc. simply follow this link:
Or go to our home page at www.delawareinc.com and click on Change Registered Agent in the left sidebar or feel free to give us a call, 800-345-2677.
Watch this video for more information on changing your agent.
Typically highway use tax applies to buses, trucks, and truck tractors that have a gross taxable weight of 55,000 pounds or more. This often does not include vans, pickups, and panel trucks because they are below the weight limit.
The IRS recently advised truckers and other owners of heavy highway vehicles that the due date of their next highway use tax return has been extended. This return which is usually due August 31st. will now be due on November 30, 2011. Payments, and returns should not be filed before Nov. 1, 2011.
The highway use tax is scheduled to expire on Sept. 30, 2011. This is the reason for the extension. The IRS hopes that this extension will alleviate any confusion or multiple filings that could occur if Congress decides to modify or reinstate the tax after that date.
Last year the IRS received highway use tax payments of about $886 million from about 650,000 forms.
If you are acquiring and registering a new or used vehicle during the July-November period, new regulations require a state to register the vehicle without the use tax being paid. The person registering the vehicle must provide a bill of sale showing that the vehicle was purchased in the last 150 days.
For more information on highway use tax, please contact the IRS directly or visit www.irs.gov
It is the requirement of every corporation incorporated in the state of Delaware to file an annual report every year. After the annual report is submitted, some clients wonder what happens with the information that is filed. Here are some more questions frequently received from our clients regarding the annual report.
Who can see the details that are filed on an annual report?
The company must provide some basic internal details on the annual report. The state of Delaware requires (1) the principal place of business, (2) names and addresses of all directors, (3) name and address of one officer and (4) authorization to file the annual report by a director or officer. Some maximum stock companies (those companies with over 5000 authorized shares) must also provide the total gross assets and total issued shares on the annual report.
Every annual report and the information listed becomes part of the official filing history of the company. The annual reports are electronically stored with the secretary of state’s office and the reported details cannot be viewed publicly. Therefore, it is not possible to see a filed annual report online with the state of Delaware.
How can a copy of a filed annual report be obtained?
Perhaps the details of the company officer and/or directors need to be provided for banking or contract purposes. The state of Delaware does not maintain an online database that allows anyone to view a copy of documents on file for a company. Therefore, in order to obtain a copy of a filed annual report, the document must be requested from the secretary of state’s office for a fee. The document is issued in black and white, just like all other state documents, so it can be printed and used immediately. Even though a copy of a filed annual report can be obtained, any information regarding a company’s total gross assets and total issued shares will not be disclosed. Therefore, for the specific companies that must provide this information on their annual report, those details will still remain private.
What if the information on an annual report needs to be modified?
Sometimes the details that are listed on an annual report can change throughout a year. For example, a director may resign, a new secretary may be elected, or there could be a change of principal place of business address for the company. In this case, an amended report needs to be filed to update the information previously filed. A completely new annual report must be filed in its entirety to replace the previous annual report on file. It is not acceptable to file a partial amended annual report that simply indicates the new details to be updated. The state of Delaware will allow an amended report to be filed up to one year after the date of the originally filed annual report.
Harvard Business Services can assist in obtaining a copy of a previously filed annual report or file an amended annual report for a company. Contact our office and we would be happy to help with any questions or requests.
See answers to more common Delaware annual report questions.
For those of you who haven’t yet had the pleasure of speaking with a representative here at Harvard Business Services, Inc., you will find that we are helpful, friendly and ready to take care of your corporate needs.
If you have just incorporated your company through Harvard Business Services, Inc., congratulations! If you plan on conducting business in the United States, your next step is to apply for an EIN, as it is mandatory.
An employee identification number (EIN) is a nin- digit number the IRS assigns to employers, corporations, sole proprietors, partnerships, government agencies, non-profit organizations and many other business associations in order to identify tax accounts. Harvard Business Services, Inc. provides a fast and efficient online service that will save you time and frustration.
The first page of our helpful form will ask general details, such as the company name, email address, phone number and the type of company you have incorporated. This information allows HBS to contact you if necessary and forward the prepared SS-4 application via email for accuracy and signature.
Next, the IRS requires a mailing address. This is used to forward a formal acceptance letter, which will include your Employer Identification Number. Please note the county is required. If the mailing address for the company differs from the principal place of business (physical location), our application allows you to include both. The final question on this page asks about a trade name, aka doing business as or DBA. Kindly include the name, if applicable, save and continue.
Next you will see the Responsible Party details. As stated on the application, the responsible party must be authorized to receive correspondence from the IRS. A Responsible Party may be a principal officer, general partner, owner, grantor, or trustee. If the Responsible Party has a valid social security number, you may safely enter it here. However, as noted, the online form can be submitted to Harvard Business Servies, Inc. without the SSN, ITIN or Member EIN number. We will send the application to you for review, and you may add the number at that time. However, we cannot apply as a nominee; you must sign the application before we can submit it to the IRS for you.
Once you have completed the Responsible Party details, please save and continue. You are more than halfway through the application. Next you'll need to share with us more specific details about your company. To expedite this, we have included options for the category that best describes your business. Please provide a description of your business activity (a short explanation will suffice) and the state of incorporation and date in which the company was formed. If you do not know the date your company was formed, feel free to contact our office or refer to your Certificate of Incorporation.
Is December your closing month of the accounting year? If not, please adjust accordingly. If you are forming a Limited Liability Company taxed as a partnership, your year-end must be December 31.
Then, if you are applying for an LLC, please include the number of members involved. The IRS defaults a single member LLC as a Sole Proprietorship, and two or more members default as a Partnership. For Corporations, you will be asked the type of entity you own.The drop-down box lets you choose from C-Corp, which can be described as a classic or general corporation taxed pursuant to Subchapter C, or an S-Corp, which is a general or close corporation that elects to pass income, losses, deductions and credit to their shareholders in order to avoid double taxation. For any additional information, please call our office.
Does your company plan on hiring any employees in the next twelve months? Please be sure to keep in mind this is for United States employees only. After answering this question, please hit save and continue.
If you will be hiring employees, you will need to know the first date that wages will be paid, and the highest number of agricultural (i.e., farmers), household (i.e., driver, maid) and other employees expected in the next twelve months. Please select the appropriate answer regarding total wages expected and continue to the next page.
The final page provides the services you would like to order from Harvard Business Services, Inc. If you decide our Standard service suits your needs, please expect the emailed application for review within 24 business hours. Would you rather have the application in your hands immediately? The Express Service would be better for you. You’ll be on your way to opening that bank account in no time. We make it easy for you.
Health insurance costs for small businesses keep increasing. This happens year after year and I know I’m not alone! I’m not talking about little increases; for us it’s always well into the double digits. Switching providers proves to be a huge pain and still involves an increase. Typical solutions include passing on more of the expense to employees and reducing the amount of benefits they receive. I was sick and tired of passing this burden on, so I got creative this year. We’re trying out a Health Reimbursement Arrangement (HRA), a creative and flexible way to offer great benefits and save money.
With an HRA, you switch to a significantly less expensive health insurance plan, one with a deductible, higher co-pays and larger prescription costs, for example. The savings earned with this cheaper plan can then be used to reimburse employees for health-related costs. The HRA is a federally-approved account, contributed to by the employer. The employee never actually owns the money but gets reimbursed for out-of-pocket expenses. Employers can detail which expenses are covered and set maximum payments, thereby controlling total costs. Thus, insurance is used for significant, unforeseen loss and not routine expenses, its intended purpose. This is a fundamental change in how most of us use insurance, and it's a rising trend for the reasons outlined below:
Great for employees. I see this as being a win-win for employers and employees. You do need to invest in explaining this to employees (your broker can help) but its an easy concept to understand and appreciate. Employees have an easy one page enrollment form and then get a credit card in their name ready to use for authorized purchases. HRA funds are tax free.
Our company’s old insurance plan had $25 office visit co-pays and with our new plan it increased to $75. However, with our HRA arrangement employees can use their card for all co-pays and don’t even have the $25 expense anymore. Unless you set a maximum that the employees hit, it’s certainly a more desirable arrangement.
Ultimately, employees have more choices and more coverage. For me personally, when our old plan charged $50 for a specialist, I didn’t want to go to physical therapy for my knee regularly. Now that this doesn’t come out of pocket, I’m much more likely to go, getting proper health coverage options is better for everyone.
Great for employers. You can use the same insurance company; you simply switch plans without worrying your employees' doctors won’t be in the new networks. You will need a third party HRA provider (we use, and like, http://www.choice-strategies.com); this removes legal risk and makes set-up and administration easy.
Money put towards the HRA is tax-deductible but not pre-funded; the money is used as needed. It’s only a promise to pay so you don’t need to dump loads of cash in advance. Importantly, most likely all the funds allocated for reimbursing employees won’t be claimed, which offers you savings. You can set maximums on reimbursements to fully limit your overall liability, but you still might see considerable savings. According to Alan Nadolna of The Associates Group, employees generally use only 30% to 40% of the funds earmarked for the HRA.
Imagine being able to provide better health insurance for your employees but only paying for it if your employees use it. Take control of your health care expenses and build a strategy around it. Provide stronger benefits to your employers. It’s no wonder health reimbursement arrangements are on the rise.