The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.
All corporations that are incorporated in the State of Delaware are required to pay a franchise tax and file an annual report in order to maintain their corporate existence. Whether you have a minimum stock company, maximum stock company, non stock company or an exempt company, the annual franchise tax fees must be paid and filed every year.
Now is the time to take care of your franchise tax filing! Over the years, Harvard Business Services, Inc. has assisted thousands of clients worldwide file their annual franchise tax reports.
From now until December 31, 2010, we will offer our expert franchise tax filing services for the online discounted fee of only $29 per company, plus the actual franchise tax amount due. We will ensure that the annual franchise tax report is filed accurately and on time with the State of Delaware. An email receipt for the services will also be sent for your records.
To take advantage of this online discounted filing fee, simply go to our franchise tax quick link at: www.delawareinc.com/payft/. You will need your exact company name and Delaware state file number to get started.
This year Delaware General Assembly increased the late penalty to $125 for any company that does not pay and/or file the annual franchise tax report by the deadline. Let Harvard Business Services take care of the franchise tax filing for you, so your company will not be in danger of owing any additional fees. We have a knowledgeable team who is ready to help with any questions you may have regarding the annual franchise tax filing. We can also file a franchise tax report for any other Delaware company you may have; even if we are not the Registered Agent.
If your company is no longer active and not being used, we can also assist to file dissolution documents, so that your company can be legally and formally closed with the state of Delaware.
Contact our office if you have any questions or concerns with your franchise taxes. We can be reached via telephone at 1-800-345-2677 or 1-302-645-7400, Extension 6904. Our email address is email@example.com.
What is a DUNS number used for? Do you need one for your company? These are common questions from business owners interested in obtaining a D&B DUNS number. Here's what you need to know.
A D&B DUNS number is a nine-digit number that is recognized as the universal standard to track businesses worldwide. It is designed to enhance the credibility of your business and enable potential customers, lenders and suppliers to learn about your company. This number can be a major factor in business credit decisions. It will come with an attached score from 0 to 100, such as a grade would—75 and above is considered an excellent score. This score can be compared to a credit score, but for the business. Clients can easily go online to locate your score. If you market that you are listed with D&B and have a great score, this could be the determining factor on whether you will attract that client's business.
Clients often ask us, "What can I do to financially strengthen my business?" When a business first gets started, it does not have good credit. It does not have bad credit either. So what can you do to add trust to your business that has no past credit history? We may have the answer. With competition in the business world comes the need to adapt, and set your company apart. Getting a DUNS number for your company may be the right move for you to accomplish this. Typically, a person would form a corporation or LLC first, and then apply for the number. This is done so the number is connected to your company directly and not to your personal credit. Attaching it to your personal credit could possibly lower your score.
This number can be obtained by visiting Dun & Bradstreet online. To apply for a DUNS number, you will need to provide the name of your organization, address, owner's name, legal structure, formation date, the nature of the business and the number of employees. D&B has been helping companies for nearly 167 years, and their database contains over 140 million business records. It offers many other services, such as sales and marketing solutions, Internet tools and company research.
Emails that appear to come from the US Department of the Treasury, Electronic Federal Tax Payment Division have been sent to many businesses all over the world and alarmed many of Harvard Business Services, Inc.'s clients. These emails have generated a number of calls to our office and we wanted to help shed some light on the topic.
Below is an example of the email:
Your Federal Tax Payment ID: ****** has been rejected.
Return Reason Code R21 - The identification number used in the Company Identification Field is not valid.
Please, check the information and refer to Code R21 to get details about your company payment in transaction contacts section:
The Electronic Federal Tax Payment System
The IRS has made the following announcement:
The IRS recently became aware of a fraudulent scheme targeting EFTPS users, the scheme uses an e-mail that claims your tax payment was rejected and directs you to a website for additional information. The website contains malware that will attempt to infect your computer.
If you receive a message claiming to be from the IRS or EFTPS, please:
Do not reply to the sender, access links on the site or submit any information to them.
If you receive a suspicious e-mail or discover a website posing as the IRS, please forward the e-mail or URL information to the IRS at firstname.lastname@example.org.
If you’re a small business owner closing in on retirement, these last 18 months may have you reconsidering the transition, especially if your 401(k) took the plunge with the nation’s economy. Now your five year plan is a ten-year plan, so in an effort to catch up, you begin tossing excess profits into a contribution plan whose growth is based on the performance of a struggling economy. Seems kind of risky, huh? What if the market falls again? How far away from retirement will you be then?
Cash Balance Plans offer small business owners a low risk alternative to a traditional defined contribution plan. As with any financial vehicle, lower risk usually translates into a smaller return, but when the market bottoms out the Cash Balance Plan stays intact because the benefits are guaranteed. To read more about Cash Balance Plans and their real-world applications, check out the article, “The Best-Kept Tax Secret for Small Business” by Nancy Mann Jackson that was recently featured on CNNMoney.com. Below is an excerpt:
For two years, Dr. James Smouse of Atlanta Oral and Facial Surgery tried to convince his younger partners to participate in a cash balance pension plan, a unique defined-benefit plan that offers business owners the opportunity to make hefty, tax-deferred contributions toward their retirement savings. But until the recession hit, they weren't interested.
"They thought they'd be better off investing their money in stocks and other vehicles," Smouse says. "But what happened over the past 18 months showed there's a risk, and after working a few years, they've seen how much money they have to pay in taxes."
With their cash balance plan -- which guarantees an annual return of 4%, compounded over 30 years for the youngest participants -- Smouse's partners realized they could enjoy significant retirement benefits with tax savings now and little risk later. So in 2009, the group worked with actuaries at Jacksonville, Fla.-based Dorsa Consulting to establish their plan.
The cash balance pension plan -- little-known and even less understood -- is growing in popularity. "It's the best-kept secret in retirement planning. Even CPAs don't know about it," says Stephen Dobrow, president of Burlingame, Calif.-based Primark Benefits.
The plans, which involve mandatory annual contributions, work best for small business owners with fewer than 20 employees and excess profits of more than $50,000 per year that they can afford to sink into funding a pension , says Richard Jensen, president of BRS Consulting in Little Rock, Ark. If your company fits the bill, you can enjoy these benefits:
Accelerated Retirement Savings. Most business owners don't begin saving aggressively for retirement until they're five or 10 years away from it, Dobrow says. They tend to plow any extra profits back into the business.
For those owners, a cash balance plan offers an opportunity to catch up quickly. At Smouse's office, owners who are less than five years from retirement can sock away an extra $60,000 each year pre-tax, beyond their investments in the firm's profit-sharing plan. Younger owners only have to put in $10,000 per year.
Security. A cash balance plan is a defined-benefit plan, as opposed to a defined contribution plan like a 401(k). That means that it guarantees a targeted annual benefit beginning when the owner reaches a certain age. Working with an actuary, participants set annual contributions that will yield the set benefit.
And upon retirement, those benefits are guaranteed: "When the market fell, people's cash balance plans didn't drop; their 401(k)s did," says John McCrary of Dorsa Consulting. "People with a cash balance plan didn't lose anything."
Those benefits are guaranteed by the business. As the plan's sponsor, it's responsible for the funding. But most companies shift the responsibility to a financial services firm.
For example, say a plan wants to guarantee a post-retirement benefit of $1,000 per month for life. The plan sponsor can then go buy an annuity from a company like ING.
"ING promises to pay that participant the $1,000 per month as long as they live," McCrary says "The only investment risk that the participant now has is that ING stays in business during his lifetime. No matter what the market does, the risk now has shifted from the plan to ING. But they have a pool of money to pay from, so they really have maybe 15 to 20 years for the market to rebound and start growing again."
McCrary compares a defined benefit plan to a loan. "We know how much we want at retirement, we know how many years we have until we reach age 65, and we can estimate a rate of return," he says. "It's not really quite that easy, but that is the big picture."
However, if the investment returns are poor, the plans can be underfunded. Because most cash balance plans for small employers will terminate when the owner retires, the final contribution due is the amount needed to cover any underfunding. In that case, the owner can either contribute the full amount or waive any shortfall, which means they will take a smaller benefit, McCrary says.
But cash balance plans are conservative, aiming for slow, steady growth with a return of 5% to 6% percent, which helps limit losses in a bad market.
Have you seen The Social Network? This movie tells the story of what happened before Facebook became a household name and it offers valuable lessons for entrepreneurs.