Company Checklist Gary Price of Ireland, San Filippo, LLP   Selecting your business - are you in the right one? I. Selecting your professional team   A. Your CPA B. Your Attorney C. Your Banker  D. Your Insurance broker E. Your Pension administrator and Investment advisor II. Selecting legal entity  A. Sole Proprietorship B. Partnership  1. General Partnership (GP) 2. Limited Partnership (LP)  a. At least one general partner and rest are limited 3. Limited Liability Partnership (LLP)  a. In California only for accountants and attorneys b. ALL Partners are limited C. Corporation  1. "C"  2. "S"  a. 75 day election - IRS Form 2553 & CA Form 3560 b. only US individual shareholders (minor exceptions) c. Max of 75 shareholders d. Net income taxed at individual shareholder level  D. Limited Liability Company (LLC)  1. Liability protection of a corporation  2. Taxed like a partnership  3. Any kind of members 4. California does not allow LLC for any regulated business E. Delaware Registration first then California an foreign entity  1. Usually better director/member/partner liability protection III. Selecting Year End (seasonally exception can be applied for)   A. Sole proprietorship - December 31st B. All Partnerships (GP, LP, LLP) - usually year end of majority of partners  C. Corporations  1. "C"   a. Personal service type of businesses use 12/31 b. All others can choose any year end  c. Year end set with tiling of first tax return (not application for ID number) 2. "S" 12/31 (complex exception for up to 2 mo shift)  D. LLC - usually year end of majority of partners    IV. Registering with authorities  A. Secretary of State (Attorney)  1. Sole Proprietor - No  2. General Partnership - No  3. Limited Partnership - Yes  a. Needed for state tax return  4. Limited Liability Partnership - Yes  a. Needed for state tax return  5. Limited Liability Company - Yes   a. Needed for state tax return  6. Corporations (C or S) - Yes   a. Needed for state tax return  B. Federal ID # - All entities must file Form SS-4 with IRS (except for Sole Proprietors without employees)  1. Used for filing federal tax returns and payroll filings  2. Needed to open bank account C. Fictitious business name - Sole proprietor, county by county  1. Helps protect doing business as (d.b.a.) name in county D. Trademark, Trade Name, Patents, Copyrights - various federal, state and/or international regulatory bodies  E. Payroll - Employment Development Department (EDD)  F. Sales and use tax - State Board of Equalization (SBE)  1. Bond or cash deposit may be required   2. Watch items bought out of state, taken out of inventory or not bought for inventory G. Local Business license and tax - City  1. SF business tax H. Unsecured business property tax - County tax assessor  I. Regulated type of business?  1. Consumer affairs  2. Board of health  3. Other? V. Employees   A. Register for Federal (IRS) & State ID#s (EDD)  B.Withholding requirements  1. Federal - Circular E  2. State CA Employers Tax Guide C. Deposit requirements - when and how (EFT)  D. Payroll records  1. W-4  2. 1-9  3. Compensation card   4. Cannot withhold from employee w/o written permission for other than regulated withholdings E. Use payroll service - even for as little as one employee  F. Employee contract  1. Non-compete  2. Technology G. Personnel File  1. Resume  2. Employment contract  3. Health insurance enrollment if any  4. Confirmation of auto insurance  5. Labor law filing requirements  6. Payroll records (see V.D. above)  7. Personnel review reports and disciplinary actions H. Labor law  1. Acquire employee handbook (see Chamber of Commerce)  2. Labor law posting requirements I. Employee Benefits  1. Medical insurance  2. Dental insurance  3. Vacation policy  4. Sick or personal leave policy  5. Retirement plans - 401k and/or pension plans  6. Cafeteria plans (Section 125)  a. Menu of other benefits to offer employees  i. Up to $5,000 child care coverage  ii. Cover medical deductible  iii. Extra medical, dental or eye insurance b. Paid for by using pre-tax salary reduction  c. Both Employee and Employer saves  i. Employee - pre-tax dollars and no FICA  ii. Employer - no FICA or unemployment taxes J. Other  1. Equipment and supplies  2. Orientation meeting & training  3. Manager performance evaluation files K. Classification - employee vs. independent contractor  L. Exempt vs. Non-exempt - overtime paid or not VI. Accounting and Bookkeeping  A. Cash or Accrual  1. Inventory - accrual B. Chart of Accounts  C. Reporting - GAAP (external) and Management (internal)  1. Balance Sheet  2. Income Statement  3. Gross revenue by period and year to date  4. COG from other expenses  5. Gross profit  6. Research & Development  7. Sales & Marketing  8. General & Administration  9. Net profits  10. Expenses classified by meaningful and/or controllable classification  11. Comparisons to prior periods  12. Budgets  13. Cash position  14. Ratios  a. Quick  b. Current  c. Working capital  d. Debt to equity  e. Cash flow coverage  f. Other ratios  g. Industry ratios 15. A/R aging report  16. A/P aging report  17. Frequency and timeliness  18. Record keeping  a. Format  b. How long E. Reporting - Government  1. Accounting method  2. Documentation  a. Format  b. How long 3. Income tax  a. IRS  b. FTB  c. Filing requirements - annual  d. Payment requirements - quarterly 4. Payroll tax  a. IRS  b. EDD c. Filing - quarterly/annual  d. Payment requirements - 1 day to quarterly  5. Sales tax  a. SBE  b. Filing requirements monthly/quarterly  c. Payment requirements monthly/quarterly 6. Statement for Domestic corporate annual registration  a. Secretary of State  b. Filing annual and paid annually 7. Business Property Tax Return  a. County Tax Assessor  b. Filing annually and paid annually 8. Local business license/tax  a. City  b. Filing annually and paid annually 9. Regulated business  a. Regulating agency  b. Usually annually 10. Annual information reporting  a. Form 1099 - mainly for non employee compensation (non-incorporatedservice providers over $600), interest payments or rent payments  b. Form 5500 for pension (including 401k), retirementor fringe benefits plans F. Reporting - outside to banks, insurance bonding companies, or shareholders  1. Compilation  2. Review  3. Audit  4. Special reports  5. Annual report to shareholders/investors G. Internal Controls  H. Computer (never use manual)  1. Level of complexity needed  2. Cost in $ and internal/external technical expertise VI. Insurance.  A. Office contents  B. Liability insurance  C. Workers compensation insurance  D. Health insurance  1. Group plan  2. Reimbursement plan E. Business interruptions  F. Life insurance  G. Disability insurance VII. Planning  A. Business plan  B. Cash management  C. Tax planning  D. Budgeting  E.. Planning process  1. Write the plan  2. Monitor the plan  3. Take corrective action  4. Revise the plan periodically VIII. Fixed Asset management  A. Set-up system to keep track of all assets purchased  B. Security provisions for office?  1. Locks and key control (current staff and ex-staff) C. Casualty - fire, water, earthquake, etc IX. Documentation of policies and procedure  A. Employee manuals  B. Administration procedure manual  C. Operations manual(s)  D. Accounting procedure manual  E. Departmental manuals XII. Office facility considerations  A. Location  B. Space needs - now and future  C. Lease terms - length, options  D. Equipment  1. Telephone  2. Fax  3. Copiers  4. Computers & Software  5. Internet  6. Office furnishings  7. Kitchen needs E. Janitorial

Ireland, San Filippo, LLP Accountants & Consultants Offices in Fremont,Gilroy, Palo Alto, San Carlos, San Jose and South San Francisco Gary Price, Palo Alto Office 415/691-1000 phone 415/691-1000 fax