The 4^th Quarter of the year has come around again.  For some, it is time to start thinking about your 2012 business goals, however for others it may be time to consider cancelling your company.  We file thousands of companies each year and the unfortunate truth is that not all of those companies will continue to operate year after year.  While we don’t like to see a business close, we do appreciate the opportunity to serve as your registered agent.   For those business that will not be operating in 2012, now is the time to consider  a cancellation or dissolution.  Cancelling a business now rather than after the first of the year will save you from paying another year of franchise tax.

This is how it works: When franchise taxes are paid in March and June (March for a corporation, June for an LLC) of any year, they are paying the tax for the previous year.  So when you paid franchise taxes in 2011, you were paying for the 2010 operating year.  These taxes are not pro-rated.  If you were open even one day in 2010, you paid the entire franchise tax in 2011.  Just like for a business active now, they will owe a franchise tax in 2012 for the current 2011 year.

So when closing your business in 2011, there will be a cancellation/dissolution fee, as well as the franchise tax payment for 2011.  This franchise tax payment would typically not be due until 2012, but when you close the company, all taxes are due at the time of the cancellation/dissolution.

Contact Harvard Business Services for help with this service.  HBS will prepare a Certificate of Cancellation/Dissolution for signature, and forward via fax or email. Once executed, the Cancellation document will need to be returned by fax or email to Harvard Business Services. Then the Certificate will be filed with the State of Delaware later that day. The State typically takes 3-5 business days to return the receipt of filing.  As soon as the approved Cancellation document is available we will forward it to you for your records.

This document is the death certificate for the company.  Sometimes banks will ask for it when closing out company bank accounts.  You may also be asked by your accountant to provide this document when preparing your taxes, because the IRS will require it with your “Final” tax return.

As a filing specialist here at Harvard Business Services, Inc., I talk with people everyday who  have multiple companies incorporated in the state of Delaware, or even multiple registered agents and are looking for a more cost effective service. To be more specific, recently, I spoke with a gentleman that was inquiring about Harvard Business Services, Inc. and what we have to offer. Over the past few weeks, he had received registered agent renewal bills for his Delaware entities from other agents. Reluctant to pay them, because they were so outrageously high, he found Harvard’s website, www.delawareinc.com.

He agreed that our website was more than helpful but wanted to speak with a representative to get a feel of what and who we are as a company. More or less, he wanted to feel confident that our service matched or exceeded that of his current agent being that our annual fee was a fraction of what he had been paying.   As we continued our conversation, he expressed concern about the hefty fees and due dates on the renewal bills he had received from other agents and asked if there was enough time to make the switch to HBS without liability for paying the other agents. We made the switch easy for him.

In what was less than a 5 minute phone call, I was able to guide our new client through the process of submitting the requests to switch agents to Harvard for his multiple entities as he effortlessly navigated our website. Before I thanked him for his business I was able to confirm receipt of his orders and advise him that the amendment filings would be submitted to the state of Delaware before our office closed that day. I could sense the appreciation in his tone as I further explained that he could toss those bills in the trash and be assured that the state of Delaware will officially notify his previous agent of the change before the due date of his invoices.

Do you have a similar situation and are looking to avoid that large annual fee for Delaware registered agent service? We offer a simple solution even if your due date for renewal  is right around the corner with your current agent. You will be surprised at how easy and fast it is to make the switch using our hassle-free service.

At Harvard we work diligently and process all requests within 24 hours. This means your filing order will be submitted to the state of Delaware via our on-line connection without delay.

Gaining the trust and confidence of our clients is how we conduct business each and every day at Harvard Business Services. To change your Delaware agent to Harvard Business Services, Inc. simply follow this link:

https://www.delawareinc.com/ourservices/change_agent.cfm

Or go to our home page at  www.delawareinc.com  and click on Change Registered Agent in the left sidebar or feel free to give us a call, 800-345-2677.

Watch this video for more information on changing your agent.

Have you thought about changing the name of your corporation or LLC, or have you recently changed the name of your business? If so, it’s your responsibility to make sure everyone knows it, including the IRS. The specific action can vary depending on entity type, but under most circumstances changing a business entity’s name will NOT require a new EIN.  To make this determination, see IRS Publication 1635.

Though it’s rare, sometimes changes to names are made right after EINs are issued.  If you recently received your EIN and have not made any tax filings with the IRS then send your Business Name change request to:  IRS-Stop 343G, Cinicinnati, OH 45999

If tax liability for the EIN has already been determined (i.e. you’ve already filed a tax return for the entity) then there are two ways to noify the IRS of your entity’s new name.

1. When filing a current year tax return you can check the name change box on the entity’s respective form:

Corporations – Form 1120, Page 1, Line E, Box 3
S-Corporation – Form 1120S, Page, 1, Line H, Box 2
LLC (partnership) – Form 1065, Page 1, Line G, Box3.
LLC (sole member) – cannot update name by filing return; must use option 2.

2. If you have already filed the return for the current year, you do not have to wait until next year to change your company’s name with the IRS.  Changing the name of a corporation or an LLC, typically requires an amendment to be filed with the State or country where the business entity was originally formed.  Deliver a filed copy of this amendment, along with a letter informing the IRS of the name change, to the address where you filed your return. Corporations must have the letter signed by a corporate officer, while LLC’s must have the letter signed by a member.

Once you’ve informed the IRS of your new name, you’ll need to let everyone else know you’ve changed your name too.  It’s a good idea to make a list of all the other agencies and companies that you do business with on a regular basis; be sure to include all State and local tax authorities, vendors, suppliers, service companies, banks, etc.  This will help keep you organized during the transition and make sure your mail service is not interrupted. It’s your responsibility to make sure that everyone is on the same page in the new chapter of your company.