MAY 21, 2009 - Press Release

With Sole Proprietorships and General Partnerships, there is little legal separation of the owners from the businesses. So the owners are taxed on all money that their businesses make.

Corporations are recognized as entities separate from the owners by default, so the Corporation is taxed on all money that it makes. Then additionally, the owners are taxed on all money that they pay themselves from the Corporation. This is commonly known as "double taxation". Or some states allow you to file to be a special type of Corporation called an
S-Corporation, in which taxation is the same as with Sole Proprietorships and General Partnerships.

LLCs are the opposite. By default the taxation is the same as for Sole Proprietorships and General Partnerships. Or some states allow you to file to have the taxation be the same as the default for Corporations, where the LLC is taxed on money it makes, then additionally its owners are taxed on money that they pay themselves from it.

For more details, consult one of the many books written on this subject, or a local tax professional.

An S-Corporation is a special type of Corporation available in some states. They are different from traditional Corporations in that they avoid the issue of "double taxation". Specifically, the business does not pay tax on its revenues. Instead, the owners pay taxes on all business revenues. For more details, consult one of the many books written on this subject, or a local tax professional.

These filings are at the state level, typically with the Secretary of State's office. Some states also require publication of an announcement of the LLC Formation or Incorporation in specific publications. SimpleFilings has experience with these filings in nearly every jurisdiction in the United States, and we are proud to put this experience to work for you.

DBA stands for "Doing Business As" and is an official, public registration of a business name with either the state or local jurisdiction. DBAs are sometimes called "Fictitious Names", "Assumed Names", or "Trade Names". Basically, a DBA is an operating name of a business that is different from its official legal name.

A business has only one official "legal name", which is determined by its type of organization. For organizations like Limited Partnerships, LLCs, and Corporations which file with their Secretary of State upon creation, the legal name is the exact business name used in that filing. For Sole Proprietorships and General Partnerships, the legal name is the personal name(s) of the owner(s). For example, John Doe.

Without a registered DBA , your business has to operate only under its one official legal name, which if you are a Sole Proprietor, is your personal name! State law requires that you file the proper paperwork to operate even under a variation of your legal business name, and even for a short amount of time. Two examples are below.

Example #1: Jane Doe begins doing independent consulting work, marketing herself as Can-Doe Consulting. Since Jane hasn't filed the paperwork to create an LLC, Corporation, etc., that makes her a Sole Proprietorship by default. So she must register Can-Doe Consulting as a DBA, since her legal business name as a Sole Proprietorship would be Jane Doe.

Example #2: The official legal name of an entrepreneur's Limited Liability Company is "John Doe Enterprises, LLC". He markets a home building business in the summer as "JD Homes", and a snow-plowing business in the winter as "JD Enterprises". Those are both DBAs that would need to be registered, because neither matches exactly with his official legal business name.

Yes, DBAs can and should be filed for all business types - they are not just for Sole Proprietors. General Partnerships, Limited Partnerships, Corporations, LLCs, and Non-Profits that wish to operate under a name different from their one official legal name are required to register a DBA.

Yes, the laws requiring DBA registration extend to LLCs and Corporations. If the company conducts business under any name other than the exact legal name that appears on the LLC's or Corporation's formation documents, they are required to register it as a DBA. "Conducting business" can include marketing materials, letterhead, business cards, etc. in addition to actual business transactions. Also, banks generally require a DBA registration prior to opening a business bank account or establishing a line of credit.

Also known as an Employer Identification Number (EIN), a Federal Tax ID is like a Social Security Number for your business. It is a unique 9 digit number (ex. 12-3456789) that the Internal Revenue Service and other federal agencies use to identify your business for tax filing and other purposes.

EIN stands for Employer Identification Number, which is another name for a Federal Tax ID.

Federal Tax IDs apply to many different groups, including:

• Individuals/Sole Proprietors
• Limited Liability Companies (LLC)
• Corporations
• S-Corporations
• Partnerships
• Trusts
• Estates
• Non-Profits
• Other employers and business entity types

Generally, if any of the following are true you still need to acquire a Federal Tax ID:

• You need to pay business taxes.
• You have one or more employees.
• You want to open a business bank account.
• You want to start a line of business credit.
• You form an LLC, Corporation, or Partnership.
• You change from one business entity type to another such as from an Individual/Sole Proprietor to an LLC.
• You are starting a Keogh Plan, also known as a Self-Employed Pension.
• You want to bid for a federal government contract.

We realize you don't have the time to wait on the phone or in long lines, or to wade through lengthy multi-page forms. So all you need to do is submit our convenient one-page online form. Typical completion time is no longer than 5 minutes, and the form is secured for your privacy. Then we prepare government form SS-4 and obtain your signature on it, authorizing us to work with the Internal Revenue Service on your behalf to acquire and deliver your Federal Tax ID. Our service fee for basic document preparation and filing ranges from $108 to $128, depending upon your business entity type. Optional upgrades include delivery within 24 hours and delivery within 60 minutes. Sometimes as a result of the filing process we find out that clarification and/or more information is required from you, and if that is the case we will contact you by e-mail from TaxID@SimpleFilings.com.

The online form is available for all business entity types including:

• Individuals/Sole Proprietors
• Limited Liability Companies (LLC)
• Corporations
• S-Corporations
• Partnerships
• Trusts
• Estates
• Non-Profits
• Other employers and business entity types