The exact ins and outs of forming a corp.?

Machine guns, SBRs, SBSs, suppressors, destructive devices, AOW (any other weapon)
Lincoln's Wax
Junior Member
Junior Member
Posts: 14
Joined: Mon Sep 22, 2003 11:49 pm
Location: Jacksonville, Fl

The exact ins and outs of forming a corp.?

Post by Lincoln's Wax » Wed Feb 11, 2004 4:21 am

I'm pretty sure I want to get into this, unfortunately, I live in Jacksonville and getting signed off up here is pretty much impossible.

I've looked at some of the info available, and I'm also curious about any special conditions for florida, but if/when I go to a lawyer to do this, what exactly do I need to ask for? All these different S-Corp, LLC, Trusts ect go right over my head for the most part. I don't want to walk into an office and simply say "Hey, I want to create a do-nothing corporation so I can get silencers easier!".

I'm also curious as to how the taxes work out. I'm not looking to run a real business, but I'm guessing that I'll have to file taxes for the corp and that sounds like a bear. What also worries me is if they notice people who run corps that don't really do any business, would they just yank it out from under me?

A lot of people say that it's really easy to get up and running, and that seems to be true, some websites will do it for around $100, but I'm a long-term worrier and I'm concerned that it isn't exactly the easiest thing to keep up and running. I also know there's an annual fee for running a corp as well, but I have no idea what the price range is on that. I'm not looking to be sneaky or cut corners in other areas as well, if I get a corp, I want it solely for this purpose.

The only other thing I can think of to ask about now is the property requirements. Can someone run a corp from their own property, or will I need an off-site address as well?

Yeah, I'm a worry-wort and bit of a scaredy cat. I'm 24 and my biggest fear is doing something majorly wrong in the eyes of the almighty IRS that will have an extremely negative impact on how my life turns out.

Nick Ward
Member
Member
Posts: 51
Joined: Fri Sep 19, 2003 12:51 pm
Location: Miami, FL

Re: The exact ins and outs of forming a corp.?

Post by Nick Ward » Wed Feb 11, 2004 7:07 am

These links may help :

- corporation information
http://www.accessincorp.com/

- getting the law enforcement certification (about 1/3 down the page )
http://www-2.cs.cmu.edu/afs/cs.cmu.edu/ ... fa_faq.txt


Read through these and then c'mon back :)

FWIW I use a S-corp since it's just me ( I may add an officer soon) and I do no other business with the corporation except NFA transfers. An S corp simplifies the tax question immeasurably, especially if you use the corp solely for NFA acquisitions.

The state of Florida - with whom your corporation will be listed - could care less what type of business you're in as long as it's not illegal. The annual fee is $158 (includes a new copy of your docs), you can renew it online in 3 minutes and get your updated docs in 2-4 days in the mail.

When you do your NFA transfers you want to provide the examiner with as much documentation as you have proving your corp is legit, it'll help speed things along. With no other problems, a corp transfer takes 3-6 weeks to get the papers back from BATFE.

User avatar
synweap223
Newbie
Newbie
Posts: 1
Joined: Thu Oct 02, 2003 3:34 am

Post by synweap223 » Wed Feb 11, 2004 8:00 am

Great info and links Nick! Can we get this tacked? This kind of info is always useful.
"A large caliber is good to have, but its shot placement that counts"
Synweap223 out!

Lincoln's Wax
Junior Member
Junior Member
Posts: 14
Joined: Mon Sep 22, 2003 11:49 pm
Location: Jacksonville, Fl

Post by Lincoln's Wax » Wed Feb 11, 2004 11:58 am

Fantastic info!

So, with S-Corp status, all the tax duty falls back on me, I don't need to file as the company? And if the business just spends money with no income, would the loss then show as losses claimable on my tax return? So, would it just be like a seperate schedule form that would just alter my adjusted gross income?

And I didn't see anything about the requirements of having seperate property for the corp though, so setting it up at my home address is kosher?

This does all appear fairly simple and a lot less scary now, thank you. And for providing the examiner as much material as possible, would that involve making copies of all the documents you get in your "business kit" like the minutes and bylaws and business cards and so on?

User avatar
tony k
Life Member
Life Member
Posts: 1794
Joined: Tue Sep 23, 2003 6:15 pm
Location: Indian River County

Post by tony k » Wed Feb 11, 2004 1:14 pm

Lincoln's Wax wrote:Fantastic info!

So, with S-Corp status, all the tax duty falls back on me, I don't need to file as the company? And if the business just spends money with no income, would the loss then show as losses claimable on my tax return? So, would it just be like a seperate schedule form that would just alter my adjusted gross income?
Not quite. An "S" type corporation does not get double-taxed -- an ordinary corp pays its own income tax, and then when it passes money along to the owner or employees, they get taxed again on the same income (=double the tax). An "S" type corp allows the owner to only pay income tax on the income once.

Yes, the corporation still needs to file both state and federal tax returns of its own each year. They are filled with zeroes for an NFA investment S corp, and no taxes are due, but AFAIK (and my accountant agrees), you still must file them.

The IRS disallows what it calls "hobby" corporations, which never show an income and are used solely to deduct hobby expenses from your personal income tax liability. Unless you want to tangle with the IRS, DO NOT attempt to also use your NFA corp's expenses as a tax deduction. Just be happy it allows you to own NFA, and leave it at that.

Of course, if/when the corporation ever sells any of its assets, the corp's costs can be used to offset capital gains tax on the profits you make from selling the NFA items.

And I didn't see anything about the requirements of having seperate property for the corp though, so setting it up at my home address is kosher?
Yup.
The State of Florida does require every corporation to have a "registered agent" who is available during normal business hours, to accept service of any state legal papers. My attorney does this for me for free. If you use your home address for your registered agent, technically, someone needs to be there during biz hours.
And for providing the examiner as much material as possible, would that involve making copies of all the documents you get in your "business kit" like the minutes and bylaws and business cards and so on?
When you submit your Form 4, include a photocopy of the articles of incorporation that the State of Florida sends you, and also a photocopy of the document they send you each year when you renew the corp. (this proves the corp is still alive in Florida). That's all you need to send; no need to include bylaws, minutes, etc.

FYI, I had my family attorney handle the incorporation. He did all the paperwork, but he actually used a service in Tallahassee, and just billed me what they charged him -- IIRC, it was about $230 including the state filing fees. I had the articles of incorporation in my hand three days after I met with my lawyer -- they also will do 24-hour incorps for an extra fee.

HTH. Good luck!

Lincoln's Wax
Junior Member
Junior Member
Posts: 14
Joined: Mon Sep 22, 2003 11:49 pm
Location: Jacksonville, Fl

Post by Lincoln's Wax » Wed Feb 11, 2004 2:10 pm

Ah, thanks for the clarification. Anything's cool with the IRS as long as I don't wind up having to pay them tons of money. I wouldn't really even try to make money off the corp because as it is now, I get money back from the IRS each year. Not having to list them a deduction is actually a relief in my mind.


Again, thank you all for the info, it's lifted a huge burden off my mind and now I feel pretty secure about heading into this.

User avatar
mjmensale
Life Member
Life Member
Posts: 9500
Joined: Fri Sep 19, 2003 7:47 am
Location: Palm Beach County

Post by mjmensale » Thu Feb 12, 2004 8:50 pm

I've used AmeriLawyer (http://www.amerilawyer.com/)to form many corporations in the past, most recently for my NFA company. The cost was $99 for the basic Florida setup.

Boca Raton doesn't allow home based businesses but this is realistically a shell to be used for NFA aquisitions only so no problems.

Two things you will need to get are an Employer ID number (a corporate SS number) and S-Corp status. AmeriLawyer charges $35 each to do this for you - on top of the $99. You can do this yourself by getting the forms from the IRS directly. It's not rocket science! Get them here:

http://www.irs.gov/formspubs/lists/0,,id=97817,00.html

The forms you want are SS-4 for the ID # and 2553 for S-Corp status. You can even do SS-4 online!

S-Corp status is useful because once you have it, you only have to file tax returns (if any) with the IRS and not with Florida.

Also, you can be your company's own Registered Agent. That's what I do.

Moe
America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards. Claire Wolfe

Don't pick a fight with an old man. If he is too old to fight, he'll just kill you. John Steinbeck

If you try to take our firearms, we will kill you. Mike Vanderboegh

Sabot 23
Junior Member
Junior Member
Posts: 36
Joined: Tue Sep 23, 2003 11:41 am
Location: Gainesville

Post by Sabot 23 » Tue Feb 17, 2004 11:09 am

I agree that this thread should be tacked up. I have never been so hopeful about the possibility of getting an NFA weapon as I am after reading this thread. In fact, my next "big" firearms-related purchase (may be awhile yet) will likely be a suppressed .22lr or a 10 1/2" barreled pump-action 12gage "AOW".

I have considered forming a Corp for other reasons anyway. Is the S-Corp thing still useful for small-scale money-making home businesses?
"David slew Goliath... with a sling and a stone...

Samson slew the Philistines... with a donkey jaw bone..."

stratman
Senior Member
Senior Member
Posts: 482
Joined: Sat Oct 11, 2003 12:12 pm
Location: Lehigh Acres ??!!! Fl

Corp

Post by stratman » Tue Feb 17, 2004 3:08 pm

Don't forget 150.00 a year to keep the corp active. Don't let it lapse..
If you get an EIN, then you will have to file 940's, 941's etc.

Don't forget FUTA, SUTA....

Great fun, but well worth it. My corp does not make much money, but it does let me use it's machine gun !!!!

Now if I could only list ammo as 'supplies' :)

_:

User avatar
mjmensale
Life Member
Life Member
Posts: 9500
Joined: Fri Sep 19, 2003 7:47 am
Location: Palm Beach County

Post by mjmensale » Tue Feb 17, 2004 9:01 pm

Sabot 23 wrote:Is the S-Corp thing still useful for small-scale money-making home businesses?
Absolutely! It's basically a matter of being taxed twice (regular C-Corp) or being taxed once (S-Corp). You choose.

Moe
America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards. Claire Wolfe

Don't pick a fight with an old man. If he is too old to fight, he'll just kill you. John Steinbeck

If you try to take our firearms, we will kill you. Mike Vanderboegh

User avatar
mjmensale
Life Member
Life Member
Posts: 9500
Joined: Fri Sep 19, 2003 7:47 am
Location: Palm Beach County

Re: Corp

Post by mjmensale » Tue Feb 17, 2004 9:09 pm

stratman wrote:If you get an EIN, then you will have to file 940's, 941's etc.

Don't forget FUTA, SUTA....
Not necessarily. Getting an EIN doesn't obligate the company to file any particular tax forms.

The forms you mentioned are payroll-related tax forms. There are plenty of small companies that conduct business without ever having any true payroll costs. A small company owner can "pay" himself in ways other than through a "payroll."

Moe
America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards. Claire Wolfe

Don't pick a fight with an old man. If he is too old to fight, he'll just kill you. John Steinbeck

If you try to take our firearms, we will kill you. Mike Vanderboegh

User avatar
sofltodd
Member
Member
Posts: 54
Joined: Mon Jun 07, 2004 12:15 pm
Location: Miami Beach

Post by sofltodd » Mon Feb 28, 2005 12:04 pm

You can also get your EIN via phone which will take you all of 20 minutes. I believe the # to call is on the S-Corp form. They give you the # over the phone and then mail you the paper with it on it.

- Todd

User avatar
mjmensale
Life Member
Life Member
Posts: 9500
Joined: Fri Sep 19, 2003 7:47 am
Location: Palm Beach County

Post by mjmensale » Mon Feb 28, 2005 9:03 pm

The EIN (Federal Employer ID Number) has nothing to do with acquiring S-Corp status. They are seperate forms and both can be done on-line.

The form numbers and links are provided above.

Moe
America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards. Claire Wolfe

Don't pick a fight with an old man. If he is too old to fight, he'll just kill you. John Steinbeck

If you try to take our firearms, we will kill you. Mike Vanderboegh

User avatar
sofltodd
Member
Member
Posts: 54
Joined: Mon Jun 07, 2004 12:15 pm
Location: Miami Beach

Post by sofltodd » Mon Feb 28, 2005 11:36 pm

I may stand corrected but I thought it has everything to do with it since you must have an EIN to file your S-corp. The number for the EIN used to be on the S-Corp form and also on the EIN form. Perhaps it doesn't any longer, I haven't created a corp in several years. I thought it might help someone save $35.

User avatar
mjmensale
Life Member
Life Member
Posts: 9500
Joined: Fri Sep 19, 2003 7:47 am
Location: Palm Beach County

Post by mjmensale » Tue Mar 01, 2005 8:51 am

Form 2553, S-Corp status application, only has a space to enter your EIN if you have one or "applied for" if in the process of acquiring it.

The actual EIN must be applied for via form SS-4.

Moe
America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards. Claire Wolfe

Don't pick a fight with an old man. If he is too old to fight, he'll just kill you. John Steinbeck

If you try to take our firearms, we will kill you. Mike Vanderboegh

User avatar
rob_s
Life Member
Life Member
Posts: 3068
Joined: Tue Sep 23, 2003 10:10 am
Location: Lauderdale & Boca

Post by rob_s » Mon Nov 14, 2005 9:17 am

Ballpark, what are we talking about in terms of cost to go the corporate route, both initial startup and yearly costs? I don't need a breakdown of individual costs, just an estimate as to the totals.
I'll convert an Orlando Disney ride into the world's biggest trebuchet and anyone down here who doesn't know what a grit is will get a free ride north

User avatar
tony k
Life Member
Life Member
Posts: 1794
Joined: Tue Sep 23, 2003 6:15 pm
Location: Indian River County

Post by tony k » Mon Nov 14, 2005 11:14 am

norman74 wrote:Ballpark, what are we talking about in terms of cost to go the corporate route, both initial startup and yearly costs? I don't need a breakdown of individual costs, just an estimate as to the totals.
Startup: $300, + or -, including about $200 in state fees. The actual, physical paperwork has to be filed in Tallahassee, and there are services there which will do this for you, as well as overnight the approved paperwork back to you. If you go through an attorney, you'll have his fees on top of this, and he will probably just use the same Tallahassee service you would.

Annual state fee (in FL) is $158 -- that's $150 for the annual report, and another $8 for them to mail you a certificate that shows the corporation is current and in good standing. BATF requires a photocopy of this certificate to be submitted any time you send in paperwork, so it's worth paying the extra $8. It's also nice to have in-hand as tangible proof that the corp has not been dissolved.

Also note that BATF is now accepting some trusts for NFA ownership. The up-side is that there is zero annual fees: Set it up once and you can forget it. The downside is you must go this route through a lawyer; there are no DIY services. And while there are many types of trusts, there are specific requirements for BATF (for instance, it must be registered with the state, and not all trusts are) as well as other tax and possession issues. Unless you have a pro-gun attorney who understands both BATF and accounting, I'd stick with a corporation.

HTH! :smile

User avatar
mjmensale
Life Member
Life Member
Posts: 9500
Joined: Fri Sep 19, 2003 7:47 am
Location: Palm Beach County

Post by mjmensale » Mon Nov 14, 2005 12:57 pm

tony k wrote:]Startup: $300, + or -, including about $200 in state fees. The actual, physical paperwork has to be filed in Tallahassee, and there are services there which will do this for you, as well as overnight the approved paperwork back to you. If you go through an attorney, you'll have his fees on top of this, and he will probably just use the same Tallahassee service you would.
You can do your on incorporation online if you use one of these online sources. They can incorporate you in just about any state.

http://www.amerilawyer.com/

http://www.nationalbusinessinc.bizland.com/main.html

http://www.incorporate.com/

Amerilawyer is based out of Miami and charges $99 for a basic Florida corporation. They have an office in Ft. Lauderdale also. You can apply for your own federal ID # and S-Corp status via the earlier links I provided.

Moe
America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards. Claire Wolfe

Don't pick a fight with an old man. If he is too old to fight, he'll just kill you. John Steinbeck

If you try to take our firearms, we will kill you. Mike Vanderboegh

User avatar
rob_s
Life Member
Life Member
Posts: 3068
Joined: Tue Sep 23, 2003 10:10 am
Location: Lauderdale & Boca

Post by rob_s » Mon Nov 14, 2005 2:24 pm

tony k wrote: Also note that BATF is now accepting some trusts for NFA ownership. The up-side is that there is zero annual fees: Set it up once and you can forget it. The downside is you must go this route through a lawyer; there are no DIY services. And while there are many types of trusts, there are specific requirements for BATF (for instance, it must be registered with the state, and not all trusts are) as well as other tax and possession issues. Unless you have a pro-gun attorney who understands both BATF and accounting, I'd stick with a corporation.
I would happily pay an attorney to be able to go this route. Can you recommend one in the area that would be comptent to handle something like this?
I'll convert an Orlando Disney ride into the world's biggest trebuchet and anyone down here who doesn't know what a grit is will get a free ride north

User avatar
tony k
Life Member
Life Member
Posts: 1794
Joined: Tue Sep 23, 2003 6:15 pm
Location: Indian River County

Post by tony k » Mon Nov 14, 2005 2:58 pm

norman74 wrote:
tony k wrote: Also note that BATF is now accepting some trusts for NFA ownership. The up-side is that there is zero annual fees: Set it up once and you can forget it. The downside is you must go this route through a lawyer; there are no DIY services. And while there are many types of trusts, there are specific requirements for BATF (for instance, it must be registered with the state, and not all trusts are) as well as other tax and possession issues. Unless you have a pro-gun attorney who understands both BATF and accounting, I'd stick with a corporation.
I would happily pay an attorney to be able to go this route. Can you recommend one in the area that would be comptent to handle something like this?
Unfortunately, I don't know of an attorney in S.Fla. who has done these -- the NFA owners who use them are up in the Cape/Daytona area.

If you can find a local attorney who will not freak out when you start explaining what NFA items are, here are some of the parameters you should be concerned with:

--For BATF, a qualifying trust must (a) be a separate legal entity of its own; (b) be recognized by the state where it is established, in a way that allows BATF to verify with state officials that the trust remains legally viable; and (c) be established and registered in a way that allows BATF to verify with the state exactly who may legally possess the trust's assets.

With a corporation, for instance, BATF can contact state officials to make sure the corp is still current, and can verify the names and addresses of all corporate officers. At that point, all that needs to be done is for the corporation to pass a resolution identifying which officers may possess NFA assets, and give a copy of said resolution to each authorized officer. I am not sure how this would work with a trust; you need a knowledgable attorney to walk that minefield.

--For the would-be NFA owner, it is important to structure the trust in a way that allows for NFA assets to be acquired or later sold at will, with no tax penalties or legal restrictions.

This is vital with transferable MGs, given their rapid, continuing appreciation in market value. Even if you swear today you'll never sell, some day you may need $$$ for an emergency liver transplant.

Given the political realities, the same manufacturing cutoff could become law some day for other NFA items, and turn $200 suppressors into $20,000 suppressors.

This is why non-profit or not-for-profit corporations aren't a good idea for NFA ownership; in some states, some types of trusts are irrevokable, which also ties your hands. You need to preserve control over the trust's assets and their disposal.

If you can find an attorney who can work with the above, you'll be set.

Any bar members in S.Fla. willing to step in here? :smile

Post Reply