As a business owner, you could think about setting up a corporation to receive tax advantages and preserve your personal assets. An S corporation is one type of corporation that provides limited liability protection and pass-through taxation. If you own a S corporation, you might be wondering if you can operate under more than one DBA (doing business as) name. The quick answer is yes, but there are several crucial factors to take into account.
It’s crucial to first comprehend what a DBA is. A DBA is a made-up name that a company uses in place of its actual name. If your S corporation’s name is “Smith Industries, Inc.,” for instance, you might want to use a DBA like “Smith Consulting” for a new company venture. In this situation, you can use the DBA for branding and marketing by registering it with your state.
S companies allow for the use of many DBAs under a single business. However, you must keep distinct records and bank accounts for each DBA, and each one must be registered with the state where you conduct business. As a result, if you use two DBAs, you must also use two distinct bookkeeping and bank accounts to keep track of your income and expenses. This can assist you in keeping correct financial records and preventing the mixing of funds.
Another thing to keep in mind is that each DBA must be operating in accordance with the bylaws and articles of incorporation of your S corporation. In other words, you cannot operate a totally separate business that is not covered by the legal framework of your S corporation under a DBA. You might need to create a distinct entity or restructure your S corporation if you wish to launch a new firm that is vastly different from your current operations. Let’s now address some related inquiries: If I Change to a S Corp, Do I Need a New EIN?
You will need to apply for a new EIN (employment identification number) from the IRS if you are already operating as a sole proprietor or partnership and desire to change to a S corporation. The IRS employs an EIN, a special identification number, to keep track of your company’s tax liabilities. You need a new EIN when you incorporate as a S company since you separate legally from your prior business structure.
Since it relies on the particular conditions and objectives of your organization, there is no universally applicable response to this query. However, the following are some frequent justifications for doing so: You wish to lessen your personal responsibility for corporate debts and legal actions. By paying yourself a modest income and accepting distributions from gains, you can reduce your self-employment taxes.
– You want to draw in investors that favor investing in corporations over partnerships or sole proprietorships. Having a formal business structure will help you establish more credibility with clients, partners, and lenders.
What is the procedure for paying Michigan Corporation Tax? You must submit Form MI-1120S, Michigan Corporate Income Tax Return, and pay Michigan Corporate Income Tax if you run a S corporation in Michigan. The tax due date is the 15th day of the third month following the conclusion of your fiscal year, and the tax rate is a flat 6% on net income. Through the website of the Michigan Department of Treasury, you can submit and make payments online. Is There a Single Business Tax in Michigan?
No, the Single Business Tax (SBT) was eliminated in Michigan in 2007. In addition to other state and federal taxes, enterprises also paid the SBT, which was a tax on gross receipts. The new Michigan Business Tax (MBT), which ultimately gave way to the Corporate Income Tax, took its place.