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Idaho C-Corporation & Idaho S-Corporation Comparisons

An Idaho corporation in Coeur d’Alene is a legal and separate entity from its owners. Because it’s a legal entity, it can be taxed, sued, enter into contracts and borrow money. These are general factors that any corporation receives.

  • The owners are known as shareholders.
  • The shareholders elect a board of directors to manage the Idaho company.
  • The Idaho corporation has a life of its own and does not dissolve when ownership changes.

Below are the advantages and disadvantages of having an Idaho corporation in General:

Advantages
Disadvantages
  • Cost of formation is higher
  • Process of incorporation is formal and requires filing with the Secretary of State
  • “C” Corporations in Sandpoint are often double taxed, first on profits then on dividends
  • Board members can be held liable
  • Requires formalities such as annual shareholders meetings, board meetings and keeping minutes.
  • Failure to follow formalities can result in the loss of limited liability status

There are two types of corporations that are popular with small to mid-sized businesses.

Idaho “C” Corporations

An Idaho “C” corporation is the regular corporation that is taxed as a separate entity.

It requires these tax forms:

  • Form 1120 or 1120-A: Idaho Corporation Income Tax Return
  • Form 1120-W Estimated Tax for an Idaho Corporation
  • Form 8109-B Deposit Coupon
  • Form 4625 Depreciation
  • Idaho Employment Tax Forms
  • Other forms as needed for capital gains, sale of assets, alternative minimum tax, etc.
Idaho “S” Corporations

An Idaho “S” corporation in Post Falls allows the profits to be taxed like a partnership if certain qualifications are met. This means that profits and losses pass-through to the owner’s personal tax return.

    • Form 1120S: Income Tax Return for S Corporation
    • 1120S K-1: Shareholder’s Share of Income, Credit, Deductions
    • Form 4625 Depreciation
    • Employment Tax Forms
    • Form 1040: Individual Income Tax Return
    • Schedule E: Supplemental Income and Loss
    • Schedule SE: Self-Employment Tax
    • Form 1040-ES: Estimated Tax for Individuals
    • Other forms as needed for capital gains, sale of assets, alternative minimum tax, etc.

Understanding Your Idaho Corporation Bylaws and Arrears

Idaho Corporation in Coeur d’Alene Arrears Explained

The amount of money that has not been paid on the cumulative preferred stock from your Idaho corporation. Since the stock is increasing, in most cases, the dividends for common stock and other non-cumulative preferred stock may not be paid until the dividends in arrears have been paid.

In Accounting, The Word Arrears Are Used in Two Ways: 

  • One use involves the omitted dividends on cumulative preferred stock. The result of having these dividends in arrears is that the owners of the common stock cannot receive a dividend from the Idaho corporation until the preferred stock’s dividends in arrears are paid and the preferred stock’s current year dividend is also paid.
  • Arrears are also used in the context of annuities. When an annuity’s equal payments occur at the end of each period, the annuity is said to be an annuity in arrears or an ordinary annuity.

Note: Arrears is also used to mean past due to or behind in payments.

Idaho Corporate Bylaw Rules

Coeur d’ Alene Idaho S-Corporation C-Corporation Bylaws

Idaho Corporations use bylaws to govern operations, meetings, hierarchy, growth, and acquisition, etc. It’s necessary to have an authorized director or officer sign the bylaws of the Idaho Corporation. Bylaws can be amended and reviewed routinely for additional content and changes. An Idaho Corporation can consist of one or more people. If you are the only owner, you would then sign the bylaws as all decision-making positions within the company.  They should be stored in the corporate minute book along with directors’ and shareholders’ minutes and resolutions. This process is required by law to maintain your Idaho Corporation in good standing and continue enjoying limited liability.

Idaho Corporation Classes of Stock Rules

Idaho S corporations in Coeur d’Alene can have only one class of stock. Idaho C corporation can, if you want, issue different classes of stock, typically voting class that gives the stockholders the right to vote on all Idaho corporate decisions; and a not voting class, where the stockholders do not get to make any corporate decisions. Non-voting stock is sometimes issued to family members or people who are investors in the business, who you don’t want to be able to help you run your company Idaho C corporation stock is also classed as standard or preferred. Holders of preferred stock have prior or preferred claim on corporate assets over common stockholders. Preferred stockholders are often just investors, with no interest in the Idaho corporation other than making money on their investment.  Preferred stock is usually non-voting stock. Stock can have what’s called a par value, stated value per share where you say how much one share is worth, or a no-par value, where the value is not stated.

Tricks For Crafting A Perfect Sales Letters, Part One

Tricks for Writing the Perfect Sales Letters for Coeur d’Alene, Part One

It is a proven fact that great sales letters help to close more sales when starting a business in Coeur d’Alene Idaho. It motivates prospects to buy, and existing customers to buy more and more frequently. This is all music so, the sales professional’s ears. Here are a few great tricks for writing highly effective sales letters that demand the readers’ attention and motivate them to take action.

Focus 

Develop a central theme that is focused on wants, and, desires, benefits, hopes, and dreams. of the people of Coeur d’Alene. Focus on emotional appeal when targeting consumers and focus on logistical appeal when targeting Idaho business owners and managers. Basically, know the answer to the question that every prospect asks before making a purchase, which is “what is in it for me?” your key message on those points and the big benefit that they get, and not yourself or your Idaho company.

Make It Personal

Address the Coeur d’Alene letter to the person it is intended for and continually refer to them by name and “you” throughout. Single out the reader as an individual, make them feel important, special, and your second-highest priority, next to the main benefit. Of course, the two should go hand in hand; for instance, “Jane, the P-3 widget will increase your productivity on the line by 59 percent! I guarantee it, or I will personally return your money, Jane.”

Grab Their Attention

 Grab your Coeur d’Alene Idaho customers attention right away with a bold headline that:

  • solves a problem
  • creates a fantastic opportunity
  • passes a special limited offer
  • presents controversial or provocative ideas
  • highlights an important and informative statistic about the prospect’s Idaho business, industry, or target market.

Additionally, ramp up the impact of your headline by including the reader’s name into it whenever possible. Likewise, use sub headlines throughout the letter to introduce other interesting information that you know will benefit the reader. Subhead lines keep the “skimmers” in the game and involved in your letter.

Make It Relevant

Keep the content of the letter relevant to the topic or purpose and, more so, the action you want to reader to take. Keep it brief, to the point, and in perfect clarity. If what you have on the page is not 100 percent relevant to:

  • your objective
  • the reader
  • and your main message

Then zap it by punching the delete key. Only relevant information needs to be included; anything else is likely only for the benefit of your ego.

Sell to Them

Always write to sell. Even if the message or theme is not selling, the sub context should be leading the reader on a path, and each contact you make with them, be it a letter, call, or personal appointment, should take you and the reader one step closer to the sale. Merely handing out information is useless unless it helps you reach your ultimate marketing objective, which will always be sales. Think of it as connecting the dots, each line you connect to a dot takes you one step closer to the sale, and great sales letters do that: get you one step closer to making the sale.

Would You Buy?

Ask yourself, “Would I buy?” If yes, list the reasons you would buy. What is the appeal, what is the advantage, and what is the motivation and urgency to buy? And if not, list the reasons why not and what’s missing. Be honest. If you (or someone close to you who you entrust to read the letter) are not excited by what you are offering or how you are offering it, then get back to work until you are satisfied that you would buy.

Idaho New Business Startup List

Starting your own Idaho business can be overwhelming. To help you set up your Idaho business you will need to form a solid foundation with the major components in place and well-organized from day one.

  1. Idaho Business plan

Formulating an Idaho business plan prepares you and your support team for the challenges ahead. It also allows you to stay focused on the larger goals initially planned, so that you stay on course.

  1. Capital

Do you need start-up capital and money to grow and expand? Banks will want to see your financial records and those of your other Idaho investors if applicable. We will assemble the required data for your presentation to an Idaho financial institution.

  1. Legal Business Structure in CDA Idaho

Setting up the proper Idaho legal business entity will have an impact on your finances, protection, and on your credibility. We will provide advice and information based on your specific type of Idaho business and future goals.

  1. Federal Employer Identification Number (EIN)

Should you decide to incorporate your Idaho business, you will need an EIN. We will file the documents and promptly provide this important number for you.

  1. Coeur d’Alene Bank account and/or Merchant Account 

You must set up an Idaho business bank account, separate and unique from your personal accounts. It is important to immediately create your company-internal system for keeping records and tracking all transactions into/out of your new Idaho business bank account(s).

  1. Idaho Business Credit Card

Do you really need one? Most likely. Idaho Business credit cards, used wisely, can help you bridge those times when receivables are slow, and you still need to make operational purchases.

  1. Accounting Procedures

Setting up proper accounting and bookkeeping systems and procedures for your Idaho business from day one will save you time and mistakes in the future. Find the best Idaho systems, software packages, and provide training so that these tools are appropriately used.

  1. State & Federal Taxes

Don’t wait until March when your tax filing is due! Tax planning consultation will set you up so there will be no surprises come Idaho tax season. In addition, we will help you get the optimal tax deductions for your first year in business.

  1. Idaho Employee Payroll & Employee Taxes

It is vital that you correctly set up payroll, health care (if applicable), payroll taxes, payroll deductions, child support payments, garnishments, etc. If you are an Idaho business in Coeur d’Alene, Hayden, Post Falls, Rathdrum, Athol, Sandpoint Idaho then give CDA Accounting a call to help.

  1. Idaho Sales Taxes

This is a hot topic for new Idaho companies, especially those who provide goods or services to both Washington and Idaho. Having a sales tax system that you can rely upon will ensure that everything is paid in full and on time, so there are no late fees/fines or unnecessary stress.

  1. Financial Reports & Budgeting

It is critical that you have a financial report in your hand at the end of every month. This will allow you to know what is working, what is not, and where the problems are coming from. Without this report, it impossible to get the financial reality of your Idaho company and properly budget for growth.

Business Startup Checklist

Once you’ve formulated your Coeur d’Alene Idaho business idea and know where you’ll obtain the money to fund your new startup, the next step is following our instructions for starting your business right the first time!

Select a CDA Business Name and Legal Structure

You have 4 choices when selecting a legal structure:

  • Idaho Sole Proprietorship (form a Sole Proprietorship Now)
  • Idaho Partnership (form a Partnership now)
  • Idaho Limited Liability Company (LLC) (form an LLC now)
  • Idaho Corporation or S-Corporation (form a Corporation now) 

 

Obtain your Federal Employer Identification Number (FEIN)

If you are set up as an CDA Idaho Corporation, Idaho LLC or Idaho Partnership (or a sole proprietorship with employees), apply for a Federal Employer Identification Number (FEIN) from the IRS. A FEIN will be necessary to open a bank account or process payroll.

 

Open the Company Bank Account

Select an Idaho bank and open the Idaho company bank account.

Contact the bank before opening the account to see what their specific requirements are to open a business checking account; some banks’ requirements are relatively simple, whereas some banks’ requirements are extremely complex.

 

Lease an Coeur d’Alene Idaho Office, Warehouse or Retail Space (if not home-based)

Depending on your type of business (retail, office, or warehouse), arrange for office space to be leased. Contacting a commercial Idaho realtor in your area can be helpful. Also, make sure to arrange for utilities and office furniture.

 

Obtain Licenses and Permits in Coeur d’Alene Idaho

Depending on the type of Coeur d’Alene Idaho business you are in, you may need a Federal license or permit.

Most Hayden Idaho businesses do NOT require a Federal license or permit. However, if you are engaged in one of the following activities, you should contact the responsible Federal agency to determine the requirements for doing business:

  • Investment advising
  • Drug manufacturing
  • Preparation of meat products
  • Broadcasting
  • Ground transportation
  • Selling alcohol, tobacco or firearms
  • Employment

 

Idaho State Licenses and permits

Some occupations and professions require a State license or permit. Laws vary from State to State. However, if you are engaged in one of the following professions, you should contact the responsible state agency to determine the requirements for your business:

  • building contractors
  • banks
  • insurance carriers
  • physicians
  • appraisers
  • accountants
  • barbers
  • real estate agents
  • auctioneers
  • private investigators
  • private security guards
  • funeral directors
  • bill collectors
  • cosmetologists

 

CDA Idaho State Licenses and Permits based on products sold.

Some state licensing requirements are based on the product sold. Contact your Idaho state licensing authorities to determine the licensing requirements of your business. For example, most states require special licenses to sell:

  • liquor
  • lottery tickets
  • gasoline
  • firearms

Most people engaged in the types of business that require a special State License or Permit are already aware of the requirements (i.e., an accountant is familiar with the licensing requirements for accountants).

Idaho Sales Tax Permit

If your company sells physical products within the state where it does business, you may have to collect and pay sales tax. This is usually accomplished by obtaining a State Seller’s Permit or Resale permit.

Idaho Business License

Most Cities or Counties require you to obtain a business license, even if you operate a home-based business. This is a license granting the company the authority to do business in that city/county.

Hire Employees (if applicable)

If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both).

Set up an Accounting and Record-Keeping System

Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.

Company documents generally are required to be kept for 3 years, including a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments, or changes to the company. All Coeur d’Alene Tax Returns and Corporate Filings should be kept for at least 3 years.

Obtain Business Insurance in Coeur d’Alene

There are many types of insurance for businesses, but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy.” This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers an extra level of protection.

 Systematize and Organize

Prepare the business as if someone needed to take it over and run it for you. This means having a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business.

 Develop an Idaho Business Identity

Order Idaho business cards, letterhead, and promotional materials for your Idaho business. A professionally created logo can make your business look professional and established.

Get the Word Out (Marketing)

Now that you’ve set up your Hayden company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer.