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What is a small business filing receipt?

A filing receipt is a document received by a small business owner as proof that the business was registered with the state. The filing receipt is sent as part of a package granting approval of the business’s entity name and business purposes. The filing receipt serves as verification that the entity was set up legally and has the state’s support to sell products or services.

The receipt shows the date the business was incorporated, the name of the registered agent, and the legal address of the business. The form is required for secured and unsecured lines of credit against the business. In addition to information about the new business, filing receipts in some states, like New York, also include a Department of State (DOS) identification number. In those states, each registered business receives a unique DOS identification number that can be referenced in the future when working on any matter with the state agency.

Filing receipts may also be required when registering with local governments. These local receipts may be called a business tax receipt, business tax license, or business tax certificate. The document shows that the local government has approved the small business owner to begin operations. The receipt can act as verification that the fee, of tax, to register the business was legit and ordinary and that all registration criteria were collected through proper channels. There may be a small business tax of $20 to $500 required to obtain the local filing receipt, but the requirements and amounts vary by jurisdiction.

How to get a filing receipt

To get a copy of a filing receipt, you’ll first need to register your business so it can be recognized as a distinct legal entity. The exact steps you’ll need to take depend on the business structure you’ve chosen and the state you are registering in, so those factors should be noted before beginning the registration process.

Choosing the right business structure

There are multiple business structures that small business owners can choose from when making their business venture official. To select the right structure, you’ll need to keep your business needs, goals, owner information, and taxation preferences in mind when reviewing the different business structures.

Sole Proprietorship

A sole proprietorship is a small business structure that works for self-employed business owners with no employees. There is no formal registration to run a business as a sole proprietor because the business income will be reported as part of the individual tax return. A filing receipt is not issued to most sole proprietors, but all other business receipts should be organized and stored by the business owner.

Partnerships

Business partnerships may be general partnerships or Limited Liability Partnerships (LLPs), which provide protection for the partners against being personally liable for company debts. Partnerships file federal income tax returns on Form 1065. The portion of taxable income that each partner is responsible for reporting is documented on an annual Schedule K-1. Limited partnerships and Limited Liability Partnerships (LLPs) must submit the following documents when registering their business:

  • Certificate of limited partnership – Document that notifies the state of the partnership and includes contact information for the company.
  • Limited partnership agreement – Legal document between partners outlining the responsibilities of each owner.

Limited Liability Company (LLC)

A Limited Liability Company, or LLC, is the most commonly selected business structure for small businesses. An LLC has the characteristics of both a partnership and a corporation because it protects the owners from personal liability and has a similar pass-through tax structure as an individual. The entity remains separate from the individual owners and will need the following documents to register the business:

  • Employer Identification Number (EIN) – EIN numbers, also called Federal Tax Identification Numbers, can be obtained from the Internal Revenue Service (IRS) after completing an online application and are used to identify the business entity.
  • Articles of organization – An article of organization, is a document that lists the business name and address, owners’ names, and the contact information for the registered agent.
  • Operating Agreement – A document that gives a detailed account of how the company is managed financially and operationally.

S-Corp

Any business can be registered as a corporation, but small businesses that choose a corporate structure are typically S-corporations. S-Corps offer protection from personal liability, but owners are not taxed on distributions. The requirements to register as a corporation depend on whether the organizational structure is a C-corporation or an S-corporation and the state it’s registered in. At a minimum, small business owners registering their business as an S-corporation should be prepared to provide:

  • Articles of incorporation – A legal document required in every state that gives detailed company information including company name, address, business purpose, value of shares, number of shares offered, and the names of each Director or Officer.
  • Bylaws or resolutions­ – A corporation’s bylaws, or a nonprofit’s resolutions, are internal documents created by the business to explain the governance structure in the organization.

Get a registered agent

If you’ve selected an LLC, partnership, or corporation for your small business, you’ll need to get a registered agent to receive legal documents and act on behalf of your company. Registered agents can be a third-party organization or a corporate director, CPA, or attorney in the company. The registered agent is required to be named when registering the business and for each annual renewal thereafter. The registered agent will act as the point of contact for all legal documents including lawsuit notifications and lien documents. A business must select a registered agent in the same state as the business operates in, so entrepreneurs that operate in multiple states will need a registered agent in each state.

Which agencies to register with

Learning what agency to file registration paperwork with will depend on the type of business you own and the state or territory in which your primary operations are carried out.

Federal agencies

Most small business owners will only need to apply for the EIN, or federal tax ID, with the federal government. Other reasons to register with federal agencies would be to obtain a trademark for the business, brand, or product or to elect tax-exempt status for nonprofits.

State agencies

All businesses must register with the state they plan to conduct business in. The registration process can be done online in most states, but some states still require paper documents in person or through the mail. The state agency that you need to register with is typically the Secretary of State’s office, but the U.S. Small Business Administration provides a directory of state agencies on their website.

Local agencies

Most local governments do not require any type of formal registration for small businesses, but some types of entities require licenses and permits from the city or county governments. You can check with your city or county’s municipal website to learn the requirements for businesses in your area.

Why is the filing receipt important for small business owners?

Filing receipts are important to small business owners for many reasons. The filing receipt shows the taxes and fees paid to register the entity, which is important because payment solidifies the legality of registration. Fees paid to register the entity are also tax deductible, so the receipt is required to be available to the IRS. Some states require business owners to provide a copy of the filing receipt when opening a new business bank account or applying for a term loan, business line of credit, or other loan option.

Filing receipts are only issued once the initial business registration paperwork is completed, submitted, and reviewed and payment is made. Duplicate copies of a business filing receipt are not available in most states, so holding on to the original is a priority. If the original receipt is requested by a federal or state agency, the small business owner will have the option to show proof of payment, the Articles of Organization documents, and a business license. Credit card or bank statements satisfy the requirement for proof of payment in most jurisdictions.

Everything you need to know about other small business receipts

Organizing a functional recordkeeping system is part of being a responsible entrepreneur. Business receipts, like the filing receipt, are important records of business expenses. Receipts are necessary for supporting claimed tax deductions, allocating program and project expenses, preparing for financial audits, and more. The challenge for many small business owners is learning which receipts should be kept, like those from the following expense categories.

Income Taxes

Taxpayers file a federal income tax return and a state return annually to calculate their tax liability at tax time. Receipts for payments made to the IRS or state department of revenue, file receipts, and employment tax receipts should be kept by small business owners.

Fixed assets

A fixed asset is purchased for long-term use by an individual or a business. These assets, like land, buildings, equipment, and fixtures, are listed on a business’s balance sheet but don’t affect annual net income. Keep receipts for the purchase, maintenance, or repair of fixed assets to support the financial reports and help calculate depreciation.

Inventory

Save receipts for any new or used inventory for your small business. These records should have the payee, the amount, the item, and show proof of payment. For retail businesses, inventory appears on the balance sheet as an asset, so any financial audits would require proof of payment. The cost of purchasing inventory also reduces taxable income, so the income tax return requires a receipt.

Other expenses

It is a good policy to keep receipts for all business expenses, but special attention should be paid to these tax-deductible expenses.

  • Entertainment
  • Advertising
  • Office Supplies
  • Equipment
  • Vehicle expenses
  • Travel
  • Networking
  • Organizing receipts

How to organize business receipts

It’s okay to save paper receipts, credit card statements, tax records, and canceled checks in a filing cabinet, but many workplaces are moving to a more digital environment. In place of keeping receipts in a manual filing system that holds store receipts, tax receipts, and cash register reports, many individuals with their own business choose to use a program like Shoeboxed to store financial records and receipts. There are also cloud storage services and programs for business finances you can use to scan and store any documents for later reference or audit or tax preparation.

There are also accounting and finance products available to help small business owners store, organize, and track business records. Some bookkeeping and accounting software, like QuickBooks, allow for receipts to be electronically saved to the cloud along with other financial data. Storing receipts in a digital database makes them easily accessible for tax purposes or to prepare or audit financial statements.

Final thoughts

Whether you are preparing to file your first federal tax return or applying for a business line of credit, like IT entrepreneur, Deepak, your business filing receipt and other business records are important. Once you’ve registered your business as a sole proprietorship, LLC, partnership, or corporation and received your business filing receipt, be sure to safely file it along with receipts for all future business expenses.

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