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everyone thank you for joining us today this is Michael Cooper with Harvard Business Services and I am joined by Brett Melvin our director of US sale want to welcome you all to our webinar today I want to start just by asking everyone on the line if they could just use the chat and let us know where you're located in world media we work with people here in the state of Delaware all around the US and all over the world so we'd love to know who's on the line today and listening and where you're located so when you have a chance just go ahead and chat that into us and meanwhile I have a couple quick announcements that I'm going to get to before we jump into the conversation so first of all this webinar is being recorded you'll all receive a copy of the recording via email probably on Friday this week and so that you can go back and visit anything that we talked about and see if there's anything you missed and of course you're always welcome to follow up with us afterwards as well we're also going to be taking some time to answer your questions during this webinar so if you have any thoughts as as you're hearing what Brett has to say about different entity types please feel free to chat in those questions and let us know and we'll get to as many of those questions as we possibly can also there are a couple handouts available in the handout section of your webinar control panel there one is just the slides from today's webinar and the other is a quick checklist for those of you who are interested in starting your own company so that's just a quick reference for you and just looking at our chat we see that there are some people checking in where they're from mostly from the US see Delaware is the Florida and some of their locations so thank you for letting us know and I think we just need to touch on today's agenda and oh we have somebody from South Africa on the line as well too so welcome welcome everybody so today's agenda we're going to first talk about Harvard Business Services and what we do here we're going to let you know what a Delaware registered agent is we're going to talk about different business entity types such as sole proprietorships limited liability companies corporations will talk about the S Corp designation how to form a company the cost of incorporating and of course we'll take your questions at the end of this session and I should point out that we are a Delaware formation specialist so a lot of the information we're going to give you today is specific to forming a company in the state of Delaware you are of course able to form companies in other states but this being our area of expertise this is kind of where we're going to focus today but feel free to ask any questions that are unclear and just a little bit about us we were founded in 1981 in Wilmington Delaware that was about 37 years ago we're still located in Delaware we're now in the city of Lewes which is right along the coast we've helped 150,000 people over the world form Delaware companies we have 75,000 current clients and our specialty really is educating the people that come to us for assistance we have an online live chat feature we help people make phone every day and by email we really help walk you through the process of forming the company and and serve as your registered agent so we really love that to help everybody who's looking to start a Delaware company I do want to point out that we're not attorneys or accountants so anything on this webinar today please don't take it as as legal advice or accounting advice if you have questions I encourage you to check in with your lawyer your accountant as needed I mentioned a moment ago that we have a live chat feature on our website this diagram shows you where you can find that so anytime during business hours you can check in right there and get in touch with one of our people right here in our office in fact it may be Brett a lot of the time that you speak to so we're more than happy to help you with any questions you have if you get to us not during business hours you'll be able to leave a message there and we'll get back to you as soon as we can and I think our service really is what sets us apart from our competitors Trustpilot is a third party customer reviews platform and you can see we have over 2200 reviews on there we have 93% five-star ratings and we're number 11 out of over 1100 companies in the for companies category which is kind of like their b2b type category where we're also the number one business formations company on Trustpilot and in addition on Better Business Bureau we have an A+ rating we have an average five-star rating and if you happen to be on a site and want to take a look at some of our competitors that you might be familiar with I think you'll see that there really is a difference in the service that we can offer you to make that experience better so I think that's a fragging and I'm going to go ahead and turn it over now to Brett and he's going to talk everything that we discussed in the agenda hello and good day everyone my name is Brett Nelson I've had the pleasure of working with Harvard Business Services for the last 19 years I've helped countless number of clients from all over the world form and file their their corporation so I'd be glad to help all of you with any questions we're going to start off today with what is a Delaware registered agent the Delaware registered agent it's a vital function it's a requirement the state of Delaware requires that a corporation or entity maintains a registered agent at all times our job is the registered agent is going to be to accept any service or process service of process or lawsuit served on the company and for them along immediately so we're like a liaison in between your company and the state of Delaware so a service process they come in sometimes for companies that we serve as the agent on think of that as like a lawsuit service of process will come in where the registered agent will accept it we're then going to immediately upload this service of process to your online my control desk which is our online portal that allows you to manage your entities and then we're also going to send you out an email letting you know that a service process been received hopefully your company won't receive any service of process but if it does we'll make sure you're alerted at a timely fashion we're also going to notify you of the annual franchise tax which is the tax paid to the state of Delaware for the writer privilege to have a company here our job is going to be doing form of you inform you of that or if there's any other notices from the state of Delaware we'll inform you of those as well our animal agent fee is just $50 it's been fixed at 50 cents our inception in 1981 it's guaranteed never to increase and we have been all for multi-year discounts two years of service for 90 or for maximum savings three years of service for 125 dollars so that covers the registered agent we're going to start off with the sole proprietorship we've all heard of the sole proprietorship it's more or less just waking up one morning going outside hanging a sign up saying I'm I'm in business that being said it's very very easy to start off as a sole proprietorship there's really no state filing required to create the entity now the states do have business license requirement for instance if you're here in the state of Delaware clients will go to the division of Revenue which is the governing body here that governs businesses and taxes corporations it's going to go ahead and obtain the business license from the divisional revenue you'll walk in there with a check for $75 and a couple minutes later you're walking out the door with a business license it's just that easy you'll have full control and responsibility of management and operations since there's only one person involved there's no one to argue with so it's very easy to go ahead and maintain however in this day and age there are significant disadvantages of the sole proprietorship there's unlimited personal liability meaning you're liable for the debts of the company it's also not a separate entity if the company gets sued you get sued you're one in the same my experience in this day and age many people do tend to steer very clear and avoid the sole pride or structure since it just really doesn't provide asset protection at all whatsoever and this society clients want to make sure that they do have that ever so important asset protection by going ahead and forming a corporation an LLC a series LLC or some type of corporate corporate entity so we've covered the sole proprietorship we're going to move along to what is the limited liability company the limited liability company is a type of entity that provides the owners with with very strong asset protection and allows for what we call pass through taxation benefits meaning the profits and losses pass through the entity right on through to the individual members or owners of the LLC this LLC is governed by a private contract called an operating agreement the operating agreement is written by the members were owners of the company and we're going to get into some of the advantages here of the LLC first off over seventy percent of all new companies filed are the LLC and one of the reasons for that is it's very easy to operate and maintain an LLC with the corporation we have formalities we have minutes we have meetings we have dialogues we've got stock to issue there is meeting minutes there's a board of directors there's officers their shareholders there's a stock transfer ledger there's resolutions so there's a lot of formalities that are involved that are done within the company itself however with the LLC it eliminates the formalities of the minutes the meetings all that good stuff that we just talked about so I like to say it's extremely easy to operate and maintain so for a lot of clients that aren't looking to sell shares of stock to bring the board investors they often tend to flock towards the LLC just so they can focus on the business not corporate formalities so with the LLC members or owners as we call them well pardon me they're called members the member is an owner they're not personally liable for the debts of the LLC and cannot be forced to pay personally for lawsuits judgments against the company traditionally so it just really helps to put up that big strong brick wall in between ones personal life and business life so therefore it makes it extremely tough to pierce that veil to go after the individuals behind the company the LLC is also extremely flexible when it comes to the taxation the LLC can be taxed like that of a soap ridership but with asset protection it can be taxed like that of a partnership it can be taxed like that of a corporation and we'll get into that a little bit later on so with the LLC the profits and losses are traditionally passed right on through to the members to help avoid double taxation that a lot of times you people may companies may experience with a corporation another advantage of the LLC is this operating agreement and the operating agreement is is unique to each LLC it's going to spell out the economic relationship among the owners so it's going to spell out the percentage of business owned it's going to spell out the roles of each of the members it's going to also help to spell out internally within the LLC different what-if type scenarios what if a member no longer wants to be part of the company what happens to their percentage of the business what happens if somebody passes away in the company what happens to their percentage of the business issues such as that are spelled out and defined within this LLC agreement so therefore if something does arise if there is a problem with the issue down the road it's already been addressed so therefore there's no surprises all the members know exactly what is going to take place showed a particular situation arise the LLC agreement is private among the members it's not provided to the state it's not part of the public record we don't need to say it we don't care as it it's going to be your LLC's agreement some of our clients you know a good portion of our clients are non-us 17% of our business comes from clients from all over the world wanting to flock to Delaware to take advantage of the strongest corporate all's to file a company here but operate anywhere in the world that they choose this LLC agreement can be written in any language so clients are free to write it in the language that's most convenient for them also changes are going to happen in a business it's bound to happen the LLC agreement senses not file with the state since it's not part of the public record can be changed or altered at any time so for instance if a member is no longer part of the company internally the LLC agreement can be amended to go ahead and reflect the new ownership details without having to file a costly amendment with a state to update the member information Delaware doesn't want to know the member information they don't need to know the member information so therefore it's just held on file within the LLC itself so that right there summarizes what I think are some of the most beneficial aspects of the LLC it's the ease-of-use it's the flexibility when it comes to the taxation and with it being over 70% of the new formations you definitely have the strength and numbers there so we talked about all the great benefits of the LLC we do have some annual fees for the LLC and these are annual fees that are required to be paid and they're required to keep an entity in good standing with the state so we're first off going to start with the annual franchise tax the franchise tax doesn't mean you're a subway or McDonald's or anything like that it's just the term the state uses it's the tax paid to the state for the right or privilege of having a Delaware LLC it's a flat $300 tax for any entity that's formed in 2018 for instance the franchise tax will be due on June 1st of 2019 and in every June 1st there after that it is a fee that's paid regardless of how much or how little business the LLC is done this is the only tax that's traditionally paid to the state of Delaware if not actually physically operating here it's very easy to pay the tax we've got specialists here that can help we'll make sure as the registered agent we're going to send out many reminders to ensure is paid on time we have the ability to ping the state to see which of our clients have paid tax and which is which of our clients have not we're going to send many of reminders this is hey don't forget pay this tax pay this tax and we'll progressively send these reminders a little bit sooner as we get closer to the due date but as soon as you pay the tax the notice to stop so you can pay it through our service or it can be paid directly to the state the second annual fee is that registered agent service that we discussed and that's just the $50 or $90 for two years or for the maximum savings 125 for 3 years it's guaranteed never to increase that can be paid over the phone you can stop a business in person paid through online portal whatever is more convenient for you so we make it as easy as possible to ensure the company stays compliant with the state of Delaware by paying these annual fees on time so that covers the LLC some of its Vantage's goes over the annual fees we're going to move on to the corporation the corporation is an independent legal entity separate from the people who control and manage it in other words corporation and tax laws view the corporation as a legal person that can enter into contracts incur debts pay taxes apart from its owners I like the analogy I like to use is we're forming a brand new thing and this brand new thing didn't exist until the second or minute that we file it we're going ahead and filing almost like a birth certificate for the company we're filing a certificate of incorporation that's creating this brand new company and it didn't exist until the second or the minute that we filed that document so this brand new corporation is going to be owned by its stockholders it's going to be managed by its board of directors who then in turn appoint the officers to run the day-to-day operations so that
s going to cover the corporation in a nutshell now the corporation might sound a little daunting but it has its advantages for sure the corporation has three tiers of power that we discuss the shareholders directors and officers so the shareholders are the owners and they elect the board of directors who then in turn appoint the officers and some of the commonly used terms that many clients are familiar with when it comes to officers might be a president a secretary a treasurer those are terms of an officer but this three-tier power system offers great checks and balances so therefore there's checks and balances in between the shareholders or insuring the directors and officers are all more or less doing what they should the shareholders are not traditionally personal liable for debts of the company the corporation one of its main advantages is selling shares stock so shares of stock can be sold to raise capital in the company so we often see many clients that that are wanting to go public have lofty ambitions of being the next Facebook or being the next Twitter start with a high number of shares of stock so therefore they have plenty of stock to issue to potential investors the corporation is taxed at an entity level with the shareholders receiving dividends are taxed at the individual level the board of directors formal meetings minutes and and reports are required and this more or less think about it as keeping shareholders informed about the company with these minutes and annual reports so the corporation does have annual fees and they're a little bit different from that of the LLC it does have a franchise tax the franchise tax is based upon the amount of shares of stock the company authorizes so when we file this birth certificate for the corporation the certificate of incorporation on that document we're listing the number of authorized shares of stock that it has to issue so a minimum stock company in Delaware has between one and five thousand authorized shares of stock it's going to pay a franchise tax in an annual report to flat fee a two hundred out two hundred and twenty five dollars and that is due by March 1st of 2019 for any company formed in 2018 so that's often a very common startup figure for for clients looking to form a corporation and keep the annual fees down whereas we can go ahead and file a corporation with a lot of shares of stock for instance ten thousand or more shares the franchise tax and annual report fee is going to be a minimum of four hundred and fifty dollars but you know it's not uncommon for us to see clients start with 10 million shares of stock for instance because they know they're going to need to be selling shares of stock to raise capital so that little bit of franchise tax increase is just going to be a drop in the bucket once the business takes off and the investors start coming on board the other annual fee that we have is that registered agent fee we discussed that $50.00 so those right there are the annual fee is associated with the corporation so we're going to move on to what's known as subchapter S commonly called an S corp this is a nickname for the subchapter S tax status this is not a business entity type that we can form with the division of corporations this is just a nickname corporations and LLC's can elect for the subchapter S tax status with the IRS to start we're going to go over how corporations are traditionally taxed corporations are by default what we call a C status C corporations when they are formed unless they file a form 2 5 5 3 with the IRS for subchapter S tax status the C corporations are often your larger companies that have investors this type of Taxation can be beneficial for certain corporations however they typically face double taxation the company pays taxes on its profits via form 1120 the profits are then distributed to the shareholders which the owners in the form of dividends those shareholders then must pay taxes on the dividends with this subchapter S tax status the double taxation is eliminated and it's perfect for start-up entities so this subchapter S tax status was enacted in 1958 to allow for the flow through taxation the LLC the limited liability company wasn't even brought into an existence as an entity type in two of the early 90s so four years upon years this taxation was just referred to was was able to be done by corporations and his nickname was the escort because the LLC wasn't even around so when you hear the term escort will clients hey Bret I want to go ahead and file an escort so we'll have to explain to them hey this could be an LLC or it could be corporation so both the LLC and the corporation can have this subchapter S tax status and it just simply allows for this profits and the losses to pass through the entity right on through to the owners so for the LLC in the corporation's there is a form to be filed a form two five five three of the IRS it's filed with the IRS the state doesn't need to know about this tax filing the division of corporations doesn't need to know neither do we it's an election that's made with the IRS seventy-five days of the formation of the entity and we do have a service to help with the two five five three form preparation if needed so that's the subchapter S tax status which can also be obtained for the LLC so some of the advantages and disadvantages of the status so one of the advantages is it offers the pass through taxation it can go ahead and own shares of stock and another C corporation it allows for the investors to write off early losses we discuss those profits and losses passing through to the owners of the company which then they can write off that personally the S election the S corp their status avoids the double taxation the disadvantages though there are some disadvantages to this tax status it's not great for clients looking to raise investments by selling shares and one of the reasons it's not great it's there are restrictions it's restricted to 100 shareholders no more so I'm looking to raise capital there's not a lot of shareholders that can be brought on board it's restricted to one class of stock it cannot own shares and other s entities another big one networks that will go ahead and severely reduce the pool of potential investors shareholders must be US residents so that being said the S status if looking to bring aboard investors will drastically limit the investment pool so we do see clients steer clear of the S status when looking to go ahead and raise capital so we've gone ahead and covered the corporation the S status sole proprietorship the LLC now we'll get down to the fun part which is actually the the creation of the company the forming of the company people think this is going to be a task that's going to be very difficult and and when they're done they they're so surprised at how easy this was accomplished it literally takes five to ten minutes we can do it over the phone online do it in person the hardest question of the entire process is coming up with a company name once you come up with a company name we can check it for you it takes me a matter of seconds to check the availability of the name we can tell you if we're off or running or if we need to put you back to the drawing board and come up with a different name you can email us you can live chat with us we've got a spot on our website where you can check the name whatever is easier for you we're glad to oblige so in order to form the company we do require a communications contact we need an individual's name street address phone number kept current at all times a Pio box or postal mailbox is not acceptable this communications contact could be a client's attorney and accountant individual from the company responsible for overseeing the entity or the client themselves a Pio box is a okay acceptable for our mailing address but we are required to have this communications contact on file at all times now this information is only for our files it is not provided to Delaware and it is not part of public record and this address too can be anywhere in the world so our non-us clients it's not a problem if the dress is currently and if the address is in India no problem at all whatsoever as long as it's not part of banned countries Cuba Iran Sudan North Korea or Syria no problem at all whatsoever we can help we're going to need an email address for correspondence a phone number for our records if we're forming a corporation we will ask for number of authorized shares of stock it's the total amount of shares that the company has to issue and the par value we're also going to go ahead and ask the initial individuals who are releasing the company too so if this is a corporation we're going to ask for the names of the initial director or directors or an LLC we're going to ask for the names of the initial members we'll go ahead and ask for a annual billing address we'll take the payment and once we have the payment the name is cleared and we're a ok we'll go ahead and get to work we'll form the company for you railay so that's it the process to create a company is literally that easy the most important question Brett what's it cost well okay the cost to form the company is relatively very very low we recently just lowered our fees a hundred dollars so on all of our formation packages back on September 1st they were $100 higher than what's shown right here on the slide so our green formation package is going to include all the delaware filing fees to form a corporation or LLC one full year of the registered agent service we discussed preparation of formation documents it also includes us appointing the initial member director for corporation is going to provide an initial set of Bibles the companies form the same day we have the order if the names available and we have the order before 4:30 Eastern Time its form the same day so that will be the birthday of the company it takes us traditionally about three business days to have the document stamped and back approved from the division of corporations and we'll go ahead and email you right away we're also going to go ahead and include a digital seal I think of this digital seal is the official signature for the entity and all of our packages include lifetime customer support so while that's only 179 in our green formation package we have our basic package which includes everything in the green service along with hard copies of the documents by Priority Mail some ever so important templates so for the LLC it's the LLC operating agreement we're going to give stock certificates for the corporation membership or digital stock certificates for the corporation digital membership certificates various resolution forms the resolutions forms are our forms that allow allow you to take action with the company so for instance we're going to give you a banking resolution form that'll go ahead and give an individual permission to open a bank account at said Bank so that's all that's included within the basic service at only 220 million dollars and next is my favorite the standard package the standard package is fantastic because it's going to include a complete company kit with a nice three-ring binder it's got a sleeve that goes around it it's got the company name right on the spine you know so it's a great organizational tool so anything and everything that has to do with the business the corporate documents the stock certificates or for an LLC the operating agreement or anything you want to know exactly where it is this corporate kit is crucial because it's a great organizational tool it can fit right on the Shelf you'll know where it is also in this standard service we're actually going to give you physical stock certificates or membership certificates for an LLC membership certificate is like a stock certificate but for now I'll see something just tangible you can give to an investor we're going to give you a transfer ledger it's going to give you the handheld company seal which is the official signature for the company it's going to raise the paper think of this as the official signature for the company so in all packages you get a digital seal but in this package you also get a handheld seal as well it's all sent by FedEx anywhere in the United States we can assist in obtaining the federal tax ID number it's $65 if you have a u.s. address and social security number or ITIN number if not no problem we can still help obtain that E is number it is $95 for our clients that do not have a u.s. address or US social security number or ITIN number so that covers my aspect I'll go ahead now I'll send this back to Michael Thank You Brett that was great and before we jump into the Q&A section I just want to encourage everyone that's on here if you're interested in learning more about business formations and specifically Delaware companies check out our website and subscribe to our blog you can see right on your screen a way to get to the subscription link we send out weekly educational content and news from our blog we don't send any spam we rarely send more than one email per week and we definitely will never share or sell your information so if you're interested in just getting this weekly update from us please go ahead and subscribe to that we also have on our website the Delaware and corporation Learning Center you can learn about the business entities that we discussed today as well as some additional ones such as limited partnerships series LLC's nonprofits and public benefit corporations as well as closed corporations and we have a coming soon list over here these are business entity types that are kind of just rolling out from the state of Delaware including the devicive LLC merger which allows somebody to take an LLC split into two separate companies as well as registered series and public benefit LLC's we're going to be having information on those in this section of website soon as well as on our blog so if you visit site or subscribe for a blog at information as soon as it's available so thank you for joining us today we're going to do some questions now and I see we have a couple coming in so that's great if anyone else has questions please feel free to start sending them in and we're going to get to as many as we can and Brett I just kind of want to start this by going back to you know we said in the beginning that we are Delaware formation specialists so I was wondering if you can elaborate a little bit on what makes Delaware such an attractive place for someone to form a company that's a great question Delaware the way I like to explain it is Delaware has the best laws to help protect the best corporate laws to help protect the individuals behind the company it makes it the toughest to what we call pierce the corporate veil to go after the individuals behind the company one person one person alone can act as a whole entire Delaware company you don't need to bring in outside individuals to fill your board of directors to go ahead and act as officers so you don't have to have people there that you don't want your company in the first place you don't have to live in Delaware you don't have to visit the state of Delaware you just need to have a registered agent in Delaware you don't need to have a physical address in devil or either the cost to form the company are extremely low as we went over Delaware is unique it has a Chancery Court which is strictly for businesses and corporations to help expedite disputes so this Chancery Court it is unique to Delaware and it's run by judges not juries so if there's a there's a dispute in between members or dispute in between internal workings of a corporation it's going to come to Delaware and it's going to be here enrolled fairly and it's going to be handled by judges that are familiar with business law and so you're not just mixed in with a courtroom with with with other people that judges and things that aren't familiar with business so the Delaware structure is also great many of your venture capitals and angel investors I can't tell you many times I've had a client that has filed a company in California for instance to have that has had to go ahead and refil here in Delaware in order to go ahead and bring these angel investors these outside investors on board the
orporate responsibilities between the officers the shareholders the directors are clearly defined so the outside investors will will want to use a Delaware company since they're familiar with the state of Delaware so that being said it's more or less in a nutshell the strength of the corporate walls Delaware has been known for years upon years is having the best corporate laws over 60% of your Fortune 500's in New York Stock Exchange some of your biggest companies out there are Delaware companies Google Amazon Twitter Facebook Disney you name it most your banks most your tech companies they're all Delaware companies they're not actually here in Delaware they can operate these companies anywhere in the world that they want but they're formed in Delaware and governed by the state of Delaware corporate laws great thanks for that and and one of the benefits to forming dollars the the privacy that it offers people who start a business here and we actually have a question from the audience asking about the suggesting strategies to make the business entity anonymous but what can you tell us about the privacy the Delaware offers and what it means for different business types sure sure an advantage people are always worried about what's part of the public record when we'll start off with the LLC when we file the certificate of formation to create the LLC the information of the members or managers is not provided to the state it's not listed on the formation document we create a document called statement of the authorized person that releases the LLC to the initial members until any successors are elected internally within that LLC's operating agreement and that operating agreement is that internal document that we discussed it's not provided to the state and not part of the public record it's going to spell out the economic relationship among the members so there is the annual franchise tax that's paid to the state of Delaware this annual franchise tax is just the flat $300 Delaware really is just going to have their hand out looking for the payment no other information is going to be needed to be provided to them no information of the members names addresses or the managers information now with the corporations we're filing the certificate of incorporation to create the entity and on that document no information of the shareholders names or addresses no information of the officers or the directors is provided to the state it's just not listed on that document we create a document entitled statement of the incorporator and this statement of the incorporator we'll go ahead and release the corporation to the initial directors until any changes are made internally within the company two directors can be changed officers can be appointed chairs can be issued shareholders can be changed however we mentioned the annual franchise tax and in your report that's paid to Delaware by March 1st of every year that annual report is going to require information so along with the payment Delaware will require the best names and addresses of the company's directors and information of one of the company's officers so that's going to be the information as far as what's public record with the state of Delaware we've got some great questions coming in from our audience the next one I want to get to is this is a common question of again do you have to have a social security number to get an EIN start a business that's a great question um the SSN is not a requirement to go ahead and obtain the tax ID number when we obtained this tax ID number from the IRS if a client does not have the US social security number or a u.s. address there's a special process that we must go through to obtain this e is number it does take us on average 7 to 20 business days we've got a team here that all they do all day every single day is help process these CIA applications they've got this process down to a science so they will ensure that we're able to go ahead and obtain the ein number even if you do not have the US address or social security number so the cost for us to obtain that E is an SSN is only $95 okay well I think that answers that question if there's any more information you need please free to edit it or contact us through our website Janette we get all the time coming from our audience is as a non-us citizen once I for my Ellis you are in order to open a business bank account in the US I'm assuming I'm assuming the person meant bank account wasn't included in there but it sounds like that's what they mean so Fred I know you get asked this all the time what do you what advice you have for somebody wants to open the u.s. bank sure you know what good is a corporation if you don't have a bank account the process says we discuss to go ahead and open the corporation is relatively easy its quick its painless its inexpensive the tax ID number process will take the complications out of that we'll make sure that's done the banks traditionally the banks are going to need to meet with someone from the company in person along with the formation documents we provide and the tax ID number and when they meet you in person they will also need the idea of course however the banks there is not a set standard banks are constantly changing the rules and requirements required to go ahead and open the bank account what we always suggest is it's a good idea to first go ahead and reach out to a bank of your choosing and inquire with that bank find out exactly what their current requirements are in order to go ahead and work with them to go ahead and open the bank account I say it's a good idea to make sure that you get this list in writing so therefore you have all your ducks in a row and you'll need to work with the bank directly and just jump through any of the hoops that they have but they will need to meet with someone in person with the formation documents ID and tax ID number after that it's too hard to say the banks are notorious for changing the requirements and it can change daily I had clients that were flying over from Germany they had everything ready to go eyes dotted t's crossed document notarized this that they touch base with the Bank the day before they flew over and that night the Bank changed their policy and they weren't able to go ahead and open the account so working with the banks can be a little frustrating just make sure that we do reach out to these banks to find out their current rules and procedures great so we've gotten a few a few comments from one of our participants who has formed a company already in the u.s. I believe through Harvard Business Services and he's interested in establishing several subsidiaries of his company and wants to know if he can create DBAs to use as a trademark and I think maybe this also feeds into what we briefly mentioned just before we got to the Q & A that series LLC is another option for this but that's not my area of expertise that's yours Bret so I'm gonna let you answer that question often what we see when operating multiple types of business is we do see clients tend to form separate entities or separate ventures for each and every aspect of the business and one of the reasons they do tend to go this route is that way all the eggs aren't in one basket so if something happens to one aspect of the business it's not going to affect the other aspect of the business now the DBA is something it's called doing business as under a different name so there's one company and it just simply has DBAs underneath it doing business as however it still just had one company so there could be multiple different DBAs however they're not separate companies so the DBA is traditionally done where a client is actually physically operating so for instance if a client was actually physically here in Delaware it would be done with the it would be done with the state of Delaware then it would be done at the county level we're actually physically operating so every state within the u.s. is going to have their own type of requirements as far as what is needed to go ahead and obtain a DBA so it's not something that's traditionally done here within the state of Delaware unless it's actually physically operating here in Delaware then that DBA is going to be done in the county in which it's operating now often when we're seeing clients forming or seeing clients have multiple ventures it's not uncommon for us to see them form a company that's the top of the pyramid that's the holding company that owns multiple entities underneath it so that's something that we see as well is we have one company that's a holding company that then forms into separate LLC's or corporations as far as their subsidiaries go so hopefully that answers the question if not feel free to reach out to me you can call me I've got Skype at Delaware Inc com you can email me at Brett at Delaware Inc comm and I'd be glad to go over any questions alright and moving on to the next question if there's a an individual who wants to form a company as just a single person are there any limitations on what what that person can do over type of company they can form you know think about it this way we have to start small so one person one person alone can operate can form the company can operate the company by themselves for a while they can be the board of directors they can be the only shareholder they can be the president the secretary Terry the treasurer great part about it is there's no one to argue with as the business takes off and things get going you know outside individuals can come in and purchase shares can go ahead and take on roles as officers can take on roles as a board of directors a board of director to go ahead and let the company grow so it's not uncommon at all what's so uh what so ever for us to see an entity start off is one person in one person alone karthick so one other question that we've gotten is what is needed in order for somebody with a Delaware company to do business in a different state in the United States say Florida for example what do they need to do in order to start okay that's a great question the companies formed in Delaware for the strength of the corporate walls so the companies considered domestic since it was formed here in Delaware so it's domestic to Delaware however if it's physically operating in a jurisdiction outside of Delaware in a state in the US clients are exploring the process to what we call foreign qualify so its domestic to Delaware and it's foreign to the state where physically operating so traditionally if a client is hiring employees in the state opening a storefront in the state they're going ahead or physically operating in the state they're going ahead and they're exploring the process to more or less qualify it as the foreign corporation there think of it this way it's just a way for for instance Florida Division of corporations to know that hey this Delaware entity is actually physically operating within this jurisdiction so there's a filing that we make a lot of times for most states it just takes a couple days it's Bob with the division of corporations or Secretary of State's office whatever they call it within that within the state that you're located and it it will then allow the Delaware corporation of the Delaware LLC to go ahead and operate within that jurisdiction as a foreign entity all right and we have one more question right now if anyone else in the audience has a question we might have a minute to just ease it in so go ahead and send that if you have a question but otherwise I'm just going to end with when you use a registered agent can you use that registered agent street address as your own business address or do you have to include your own business or your own physical address for other business purposes the registered agents address is going to be able to on in between the divisional corporations and your company however is not going to be considered your company's mailing address or your company's physical office address now we do offer a mail slash virtual office solution where it's your company name at our address what this gives to you is the mail comes into our office we scan it by the company name we'll go ahead and email it to you or if it's physical mail that needs to be sent we'll send that to you but it allows you to have a mailing address here within the state of Delaware it also is going to go ahead and give you a 302 phone number which is the area code here in the state of Delaware a call can come in and we will go ahead and forward that to your number here within the US so now you've formed a company in the state of Delaware you have a mailing address within the state of Delaware a 302 phone number so it gives you that virtual office package so to answer your question we can act as the agent we will not be considered the physical office location we do have services as in solutions for a mail forwarding solution so if you're a client the travel travels around a lot or don't want mail coming to a condo or your home you know it's not a typical for our startups to go ahead and not have an office yet we've got to start somewhere so often the physical office location the principal place of business for a new startup is a client's home so they will traditionally sign up for this virtual office service that gives you an address here in Delaware allows us to scan the mail and send it to you provide you with a 302 phone number that's forwarded to your phone so therefore you can answer these calls directly that service is only 290 million dollars a year if you need awesome and just one quick follow-up to that question is what about an online business if somebody is out of state not not in Delaware forming a Delaware company that is an online business do they still go through the same process for foreign qualification you know that's a great question online businesses we hear that quite often it's an online business however this online business will still have a physical office location somewhere so what we tell clients is you know traditionally if physically operating in a state hiring employees in a state dole go ahead opening a storefront in the state they'll go ahead and at least start the process to explore the foreign qualification usually our clients that aren't actually physically here in the state of Delaware are often qualified somewhere so we're not able to say yes you must qualify no you don't have to qualify will depend on your unique situation but we can say that often we do see clients traditionally qualify their business where we're physically operating all right great so that wraps up our questions and it wraps up our webinar today's thank you all for joining us as I mentioned we are going to be sending out the recording I think you'll get an email right from the GoToWebinar platform that will include a link to that recording that should come on Friday again if anyone is interested in receiving information from us that's not already subscribed to our our weekly blog posts please feel free to go to our website find the subscribe link under our blog and join us there and once again you can contact us however you like by phone by chat by email right through our website we're more than happy to assist with any questions you might have and I just want to thank you all for taking some time out of your day today and we hope to hear from you again in the future you you
