Posted by Brent_IL on January 26, 2002 at 10:41:09:
I am not a lawyer or a CPA; however, regarding your first question, I’ve learned that one of the most important actions one can take regarding corporate benefits is to document your intentions in the minutes of the Corporation before you receive the benefits. Have regular board meetings with your wife, take notes of what you’ve discussed, and write it down in the minutes. Maybe pass a resolution.
You can have the minutes reflect that you have agreed to forego any salary at this time, but, in return, the grateful Board of Directors intends to compensate you with a higher than industry-wide salary and benefit package when the company is profitable.
When you pull money out, a paper trail is necessary for audit.
We got our C-Corp up and running, and just in time since we also just signed up our first flipper!
Now a couple of questions about the Corp.
I?ve read that for both asset protection reasons and to keep the IRS happy we should not work for the Corp for free, but rather have employment contracts and be sure to draw a reasonable salary. To keep things simple we really don?t want to do this, since until we complete some deals all money in the Corp would be personal loans from us. Any way around this, and if not how much is ?reasonable??
I jus opened a small biz checking acct with a CalFed and asked for a credit card account. They obliged by issuing a credit/debit card secured by the checking account funds. CalFed will convert it to a full credit account, but not for 3 years. Since I want to build up a credit record for the biz, is that type of card good? Is it viewed as true credit card for purposes of a credit history? Or is it seen to less than credit? If so, where is a good source to obtain a full credit card?