Filing for EIN ?'s - Posted by Sandy FL


#1

Posted by DJ Busch on December 02, 1998 at 07:49:51:

Raelynn,

Thanks for all this invaluable information! I’m about a week away from starting the whole incorporation process, and it’s nice to have someone to lay out the steps in advance. You’re a tremendous help to all of us “pioneers”. :slight_smile:

Hakuna Matata

DJ Busch


#2

Filing for EIN ?'s - Posted by Sandy FL

Posted by Sandy FL on November 30, 1998 at 21:02:48:

OK, a couple questions on the SS-4 for anyone else that has dealt with… I don’t want to make any mistakes! (just regular old EIN for flipping, rehabs, lease options, nothing too exotic…)

Line 8a Type of Entity – Sole proprietorship, partnership, Personal service corp, Other Corporation … What do I put? “Other corp”?

Line 10 Date Business Started - is this when I incorporated
or when I started investing in real estate? Because I bought an investment property in my own name before I bought one in the corp name.

Line 14 - Principal Activity - if you are going to be
flipping properties is it wise to put “real estate”?
Will my answer affect the possibility of being classified
as a dealer later on?

Hope you corporate officers out there can help.
(Raelynn, I know you’re watching… :slight_smile:

Sandy FL


#3

Re: Filing for EIN ?'s - Posted by Wade FL

Posted by Wade FL on November 30, 1998 at 22:35:39:

Hi, Sandy:

I started my company three years ago when I was 24. Regarding your questions:

1)You may want to choose Corporation as type of entity.
Then file for an S corp to avoid double taxation by the IRS. Your filing for S Corp has to be within a few days of initial corporation creation…plus attorneys have told me that you are 300% more likely to be audited as a C corp versus a S corp. As an S corp your profit/loss is thrown right onto your 1040 and your taxation rate is lower. NOTE:::Wade is not an attorney, he is just a regular guy from Fort Lauderdale, Florida. He has an opinion and some experience. Please check with your attorney before accepting anything he says regarding the law.

Suggestions: Call 800 directory assistance and ask for Amerilawyer…I see their ad for $99 corporation formation within five minutes in the paper all of the time.

Also, their is a good CD “How to Form a Corporation” in Office Depot. Just fill in the forms and mail with the fee to Tallahassee…

Hope that I helped you. Take care.


#4

Re: Filing for EIN ?'s - Posted by raelynn mitchell

Posted by raelynn mitchell on November 30, 1998 at 22:02:09:

On the ones I did, I put “other corporation” on line 8a. Where it says “specify” I put “C Corporation”. This may or may not fit your situation. (Yours might be an “S Corp”, for instance.)

As for “Date Business Started” I put different things for different reasons, depending on what I plan to do. I have been told that that date is the “date you do your first business transaction”, which can be complicated. If you had filed a Fictitious Business Name under yourself (DBA) prior to incorporating the business, the answer might be different from a merchant company who will not open their doors for business until say, January 1, 1999. I have been informed by others that Line 10 can be a date in the future. I did file some of them that way, and the IRS did not have a problem with it. Take the date you put in Line 10, add 15 months and 15 days, and that is the date your first corporate income tax filing, Form 1120, is usually expected to be filed. (The IRS will send you a letter acknowledging your SS-4 and informing you of the day you are to file corporate income taxes. You will also get a yellow coupon booklet shortly after the letter. The coupons are what you send the IRS along with tax payments if you have employees. You don’t yet, do you? You’re an officer perhaps, but not necessarily an employee–maybe you do, maybe you don’t.) Since in your case you say the corporation has already done a real estate deal, that deal was a business transaction.

By the way, Line 11 “Closing Month of Accounting Year” is where you inform the IRS if you will be following a fiscal year (year end January or February or March or…you get to pick) or a calendar year (ends on December 31).

At the time I did my first one, Line 14 defined exactly what I planned to do at the time (which was buy mortgages and other debts). That has since changed.

I have since put “Miscellaneous Investments” on others since doing that first one if at the time it was filled out the purpose of the corporation had not been fully determined.

Dealer status as a corporation is different than dealer status as an individual. A corporation is taxed on PROFITS, whereas an individual is taxed on INCOME.

One other thing occurred to me as I looked at the blank SS-4 Form I have in front of me. A lot of people tend to put their home address on the form. It’s your option, but you are entitled to put your registered agent’s address if in fact you have one and receive your mail there. Or you can use a mailing address, such as a Mailbox Etc.-type place. A corporation is for, among other things, maintaining privacy. Many people voluntarily give up more than is required without realizing it.

Sorry to ramble on, but I hope this helps and not confuses you.

raelynn


#5

Thanks, & Bldg Credit for Corp - Posted by Sandy FL

Posted by Sandy FL on December 01, 1998 at 04:55:25:

No, Raelynn, you are immensely helpful! Thats why I mentioned you by name :slight_smile:

I remember a while back, you also had some suggestions for what companies to apply for credit with, in the corporate name, in order to begin establishing a credit rating for the EIN. Could you tell us again? I think
you mentioned getting an Office Max or Office Depot credit card?

Many thanks-
Sandy


#6

Credit is built 2 a BUSINESS… - Posted by raelynn mitchell

Posted by raelynn mitchell on December 01, 1998 at 11:55:19:

which means a corporation should look, walk, talk, and smell like a business. This means a business phone line WITH A 411 listing. This means a business license. It also means a corporate/business bank account. Prior to applying for credit you should have these things, as most business credit applications will ask for these things. They don’t all ask for all of the above, just some, but it is best to have them beforehand.

Prior to having any of these, it is important to do the corporate “paperwork” that is needed in the beginning, which includes deciding who is president, secretary, treasurer, director, etc. It is also important to decide who will be signer on the corporate bank account, which should be opened prior to applying for credit. These are all reference points for potential creditors to “check you out” at the corporate level. There are several good books that explain the process of setting up shop in detail, up to and including the paperwork that should be done in establishing the corporation once it has been filed. Corporate resolutions are needed for almost everything, which can be found in a book/software called The Corporate Secretary. I found this at Office Depot and Office Max; costs about $20 for the book or the software. Has just about every resolution (permission slip) out there, and after a while you can figure out what to put into one if you need one slightly different from the ones they have created. (Another book I liked is Incorporating in Nevada, by Cort Christie. It also has resolutions in it, both as samples and as fill-in-the-blank forms for your use.) But keep in mind that I’m not a lawyer or CPA.

Step 1.
obtain a mailing address OTHER than your residence (mailbox etc. type okay 4 now).
Step 2.
obtain a business listing in 411 information (address not required, only city of same as mailing address) (hint: this can be a remote forwarded number, which can ring to an answering service or someone’s house, but the line must be a BUSINESS line to be listed in 411 that is answered in the company name, such as XYZ Incorporated)
Step 3.
after obtaining corporate tax ID/EIN (a step of incorporating) and filing officers list (part of inc’ing also), call Dun & Bradstreet 800-333-0505 and tell them you want to be listed. They will ask 5-6 questions.
Name of company, phone number, address of business
year started
president of corporation
number of employees

  • they will try to sell you their “investigative service” listing, which entitles them to dig into your business’ affairs. Not needed, just get the listing. If you have to pay for it, you got the wrong one.

Step 4
apply for:
Target Stores Commercial Acct
Chevron
Office Depot
Office Max
Staples
Sam’s Club
Texaco
Home Depot
Home Base
JC Penneys Commercial
Kinko’s
CompUSA

You won’t get them all. Since you have no credit, they will probably ask 4 a personal guarantee. Give it when necessary (only one corporate officer required - pick the one with the best credit); you just want the accounts. Use them one time, pay the bill on time, and they will report your company’s credit history to D & B.

  • Office Depot, Ofc Max, Staples = same bank. Don’t apply 2 all 3 in same week.

You want 5 accounts reporting 2 D & B, after which D & B will rate your company. It now has credit history. (Here’s the catch: they don’t ALL report to Dun & Bradstreet.)

Then go for Mastercard, Visa, and American Express, all of which will probably want personal info on at least one officer. Not all MC/Visa’s are created equal. Some just want to look at the officer’s credit, others want that officer to guarantee the account. Shop around.

This may take awhile, but Home Depot and Home Base are accounts you will probably need anyway if you ever end up doing rehabs.


#7

Big Thanks to Raelynn… - Posted by Sandy FL

Posted by Sandy FL on December 02, 1998 at 10:14:10:

Your posts are always “keepers”.

Sandy