Loading...
Answers
MenuRunning a sports camp for my company and partnering with two individuals. Can I simply cut them a check, or do they need to fill out a 1099?
This question has no further details.
Answers
Consult a tax accountant; I am not an accountant or an attorney and this is not "professional advice."
I do have to ask a question about the wording here. Are these partners as in shareholders of the business, or are they working for it? That will make a difference in how you go about paying them.
If you are telling them what to do and when to do it, they are employees and you cannot 1099 them. 1099 means you say "here's what I need done", but when they do it and how they do it is up to them. So if you require them to be on site from 9-5 for example, they're employees.
If they are owners alongside you, that's different.
However you pay them must follow the matching principle of accounting. Their revenue from the camp has to match how they're involved. If they're part owners, they get a dividend check and they must report that as corporate income. If they're working for the camp, my guess is that they are employees and you must go through the hassle of reporting and paying them as such.
Check your local laws. In the US as a base standard if you pay an individual over $600 in a year, you must provide them a 1099 (k?) form and have their w9 on file legally.
Related Questions
-
If I come up with a coaching methodology / formula, is it protected under Copyright?
(I'm a small biz attorney who helps people with copyright, trademark, and other IP law, and I'm answering per U.S. law.) As soon as you take your idea and put it into a tangible format (write it down, create an infographic, record a video), then that writing/infographic/video is automatically protected by copyright law. You can record the copyright on it too, which makes it easier to protect and get damages from other people taking it. But the formula itself would be probably protected under trade secret law or patent law. Patent law obviously takes a bit more effort, because you have to apply for the patent and get your application examined by the USPTO, which takes years and $$$. Keeping it protected under trade secret law means you have to make an effort to keep it secret (which may not work if you are disclosing it as part of your marketing efforts), such as keeping it confidential and requiring NDAs. As someone else said, the other terms you use might be protected under trademark law. If a member of the public would use those terms to link your products/services with the source of the product/service (aka, your company), then they could be trademark-able. There are some state law protections for trademarks, and you can also file to register the trademark with the USPTO and get more protection. Hope that gets your started!EP
-
Where to incorporate a new software as a service busines?
I'll keep try to keep this answer brief, but there are several factors and nuances that can be discussed in more depth. Where you decide to incorporate partly depends on what your future goals are with your company. Companies that plan to seek venture capital or go public typically choose Delaware as the state of incorporation, and usually choose a C-Corp. Delaware has a very well developed body of law surrounding corporate governance and that provides comfort and more certainty to future VC investors. If you're not planning to seek VC money any time soon, an LLC is a smart decision because of the tax benefits it can provide to you as the owner. It sounds like you want to grow your company on your own without outside financing. If that's the case, I would recommend forming your LLC in California. Regarding California vs. Delaware, one benefit to forming your LLC in California is that you can avoid paying a registered agent fee which can cost anywhere from $100-200 a year. If you plan to seek venture capital down the road, you can reincorporate in Delaware.JI
-
Is it possible to start a Social Media Marketing Agency with not much experience in Social Media and not much money?
I have to ask why you would start an agency in an area you don't have much experience in. Perhaps you'd be better off getting at least a little experience first?AV
-
Do I have to file form 5472 for "additional paid-in capital"?
Yes you should be reporting the capital contributions. Under the old Form 5472 rules, it's true that only items that impacted taxable income would be reportable transactions. So, a capital contribution by you to the corporation would not be reportable, unless the equity contribution was somehow below or above a fair value contribution in exchange for services that you might provide for the corporation - essentially an imputed reportable transactions. When the IRS changed the Form 5472 rules to require non-U.S. owned single member LLC's, they expanded the reportable transaction definition to include virtually everything. The term “transaction” is defined in Treas. Regs. Section 1.482-1(i)(7) to include any sale, assignment, lease, license, loan, advance, contribution or other transfer of any interest in or a right to use any property or money, as well as the performance of any services for the benefit of, or on behalf of, another taxpayer. So, for example, contributions and distributions would be considered reportable transactions with respect to such entities. These amounts can be reported on Lines 12 and 25 with an explanatory footnote that clarities the amounts are capital contributions and not amounts that impact taxable income.JK
-
How do I write an NDA with the right jurisdiction/governing law?
From a legal standpoint: an NDA is an agreement - something contractual, and therefore is not limited (by law) to any specific jurisdiction. So, you can select Delaware or California, or India for that matter. From the business aspect, the best jurisdiction to select would depend on: 1. Jurisdictions that are known to be 'friendly' to your type of business. 2. Jurisdictions in which your lawyer is licensed to practice / the cost of lawyers isn't too expensive. 3. Somewhere not to far from where you are physically located - in case you actually have to go to court. Lastly, best to add a required arbitration or mediation clause if you don't have one. Good luckAB
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.