What are the income tax and financial statement requirements for a new C-Corp that didn't have any revenue during the year?

I'm assuming you're talking about yourself, working for another company? The first thing to consider is that a "1099" is NOT an employee, rather an "independent contractor". The IRS takes it seriously when a company claims 1099 contractors, when in fact, these contractors are treated as employees (the IRS wants payroll tax and will fine companies that miscategorize). To be a 1099 contractor, rather than an employee (W-2), you must have complete control over your schedule - when you work, how much ect. There are other criteria, but this is the main one - you must clearly not be treated the same as an employee. The other thing to consider is that if you are a 1099 contractor, you are responsible for paying and submitting your own income tax and self employment tax to the state and the IRS. It is more advantageous for a company to pay you as a 1099 contractor as they save paying employer portion of payroll taxes. Also you will not count as an employee for the Affordable Care Act (which impacts companies with over 50 employees). Hope this helps. Kathryn

Since some new business owners get excited about revenue, instead of gross profit, it is always wise to show the difference. Let us consider as an example, that your business makes $10,000 (revenue) in revenue in one month, and has a cost of goods (or services rendered) of $7,000. This means that you have to pay someone (e.g. a vendor) $7,000 to make $10,000. Then, you are faced with general expenses for the month that amount to $2,000 (utilities, etc.). The excerpts that you quoted from the article mean that you should NOT think that you are spending $2,000 from the $10,000 (revenue), but that you are spending $2,000 from the $3,000 (gross profit: $10,000 - $7,000). As you can imagine, you will be much more cautious when you realize that you are spending 66% of your gross profit on expenses, and not simply 20% of your revenue. While this is certainly common sense, the reason for his pointing it out is that sometimes people do not keep it in mind.

I will answer this is the simplest form I can. Basically in every country to conduct business in you will need to pay taxes in that country. If you have an office, employees or your revenue comes from that country you have to pay taxes. These taxes will include State, Federal and Sales Tax. Moreover, this at the beginning will make you think you are paying double tax since this income also has to be paid with your local government, but it isn't so bad. This could be a great opportunity to build a tax strategy where you can take advantage of multi country taxation which can lower your overall tax bracket. There are several steps you have to do to conduct business in the US, such as incorporating first as a foreign corporation in the state you chose (Preferably one with no state tax) then filing your taxes. Your tax preparer in Canada will have to take this in consideration since there are forms he has to fill out to cancel either you Canadian Income Tax or your US tax preparer to fill out the return not to pay taxes here but in Canada... whichever tax you have to pay depending on the international treaties they have.

SOM refers to the portion of the market that your business COULD actually capture, as you stated: "[the] % [you] can realistically achieve from the SAM." Let's use an analogy to break this down - and pretend you are talking about fishing instead of project management software. TAM refers to all the fish (that manage projects) in the sea. SAM are all the fish (that manage projects) within casting range of the dock you fish from (ie your solution is viable for them). SOM are the number of fish (that manage projects) you can reasonably catch within the amounts of time, energy, and bait you can allocate to fishing. The question within a question you ask about guidelines on believability is a great one. And, while I don't have a guideline or benchmark to share, I can confirm your instinct; ensuring that your projected SOM is reasonable is absolutely critical. The best way to project this is by having at least some of the equation variables grounded in reality - ie, actually catching some fish. If you can show how much it costs to acquire a customer, how much it costs to service that customer, and how much you'll make from that customer over a lifetime, you've got some great empirical evidence to show how you'll achieve growth within your SOM. I don't think of SOM as a target - it is rather the theoretical maximum number of customers or revenue I can achieve within the (sub)universe where my product or service adds value. In the end - the number is important - but not as important as how you present it, and how you'll approach it with your product. As an investor, you want to see more than just the answer - you want the thought process behind the answer. Was the founder thoughtful in their approach, did they look beyond the obvious while remaining pragmatic? Do they understand clearly why the SAM (macro-environment) and SOM (micro-environment) break out of the TAM in the proportions they've listed? More than happy to dive deeper on this.

If your looking for financing and not wanting to give up equity you could try to get venture debt. Check out Hercules http://www.htgc.com/ and their competitors these companies can provide big loans. Be ready to provide a lot of info on your company and your financial health. Be aware these companies exist to make money so make sure you end up with payments you can handle. You'll also have loan covenants which will outline certain financial performance metric you'll need to hit. If you miss covenants your loan terms will change for the worse and it can even end up with bank taking control of your company. Obviously a worst case scenario, but you need to be aware and make sure you are very comfortable with the covenants you agree to. - mike