Questions founders ask us

No. Non-resident alien shareholders disqualify a company from S status, which rules it out for most cross-border founding teams.

If a non-resident acquires shares in an existing S-Corp, the election terminates. That is a real risk when foreign investors come onto the cap table.

Yes, you file a final return and mark it as final. Use the form your company normally files: Form 1120, Form 1120-S, Form 1065, or Schedule C with Form 1040 for a single-member LLC. If you skip it, the IRS can keep treating your company as active, which can lead to penalties, notices and extra returns in later years. Final payroll and 1099 filings are closed out at the same time, and after that you can ask the IRS in writing to close your EIN.

Closed books for the year: income statement, balance sheet, and the apportionment data showing how much activity sits in California versus elsewhere.

The federal return usually comes first, since Form 100 starts from federal taxable income and adjusts. More on California Form 100.

A FIRA, or Foreign Inward Remittance Advice, is the document an Indian bank issues confirming money came in from abroad and for what purpose.

It is the proof of export earnings that auditors, the RBI, and GST refund claims rely on. Without it, an inbound payment from your US parent is hard to substantiate.

On the W-8 itself, by naming the treaty country, the relevant article, and the rate claimed, and providing a taxpayer identification number where required.

An incomplete treaty claim is treated as no claim, so the full statutory rate applies. Check the form before you rely on it.

The company name, the registered agent and address, the number and class of authorized shares with par value, the purpose clause, and the incorporator's details.

Most startups file a single class of common stock at incorporation and amend later when preferred stock is issued.

Net burn is cash out minus cash in for the month, taken from actual bank movement rather than the P&L. Runway is your cash balance divided by net burn, in months.

Gross burn ignores revenue and is the larger number, so check which one a figure refers to before comparing it to anything.

Yes. An LLC can hold shares in another company, domestic or foreign, the same way a corporation can.

What changes is the reporting. A US parent owning a foreign subsidiary generally has Form 5471 obligations, and funding that subsidiary can trigger Form 926. Neither depends on whether the parent is an LLC or a corporation.

Yes. Either a personal LLP or a registered partnership works as the vehicle through which an India-resident owner holds US company stock.

The structure is identical in both cases, one vehicle per owner. The choice comes down to setup cost and ongoing compliance. More on FEMA and residency.

On or before the original due date of the return, which is 15 April for a calendar-year C-Corp. Filed on time, it extends the return to October.

Form 7004 extends filing only. Tax owed is still due in April, so estimate and pay with the extension.

If you are issuing one, you file it through an electronic provider rather than printing the IRS copy, which is scannable and cannot be downloaded and submitted.

If you are expecting to receive one, it comes from whoever paid you. Our 1099 guide covers both sides.

No. A name change or an address change does not require a new EIN. You update the IRS instead, using Form 8822-B for an address or responsible party change.

A new EIN is needed when the entity itself changes, such as incorporating a sole proprietorship or converting an LLC to a corporation.

For automatic method changes, no. You file Form 3115 and the consent is deemed given if you follow the procedure.

Non-automatic changes need advance IRS consent, come with a user fee, and can take months. Which category your change falls into is the first thing to establish.

Often not for those sales, because marketplace facilitator laws make the platform responsible for collecting and remitting.

It depends on whether you also sell through your own site, and on whether inventory stored in a state creates physical nexus. Both are common and both change the answer.

For companies that do not operate there, yes. No state sales tax, and no income tax on earnings made outside the state.

Franchise tax is still owed annually regardless of revenue, and you still pay income tax wherever you actually do business. Our guide to Delaware corporation tax covers both sides.

It is used to request a change in accounting method with the IRS. The most common reason is switching from cash to accrual, but it also covers depreciation changes, revenue timing adjustments, and catching up on missed deductions from prior years.

If you are a US person with ownership, or an officer or director position, in a foreign corporation, probably yes. A US parent with an Indian subsidiary is almost always in scope.

Your filer category decides which schedules you complete. Penalties apply per form per year even when no tax is owed. Our Form 5471 page.

Under accrual accounting the expense is recorded when the bill arrives, not when it is paid. An unrecorded bill understates costs and overstates profit for that month.

It also sits in accounts payable, which is how anyone reading your balance sheet judges what you owe. More on accounts payable.

Schedule A for itemised deductions, B for interest and dividends, C for self-employment income, D for capital gains, and E for partnership and S-Corp income, among others.

Which you file depends on your income sources. An owner with a K-1 and stock sales typically files D and E. Our guide to the 1040 schedules covers each one.

If you are a US citizen or green card holder, yes. US filing obligations follow status rather than location, and living abroad does not remove them.

Non-US persons file Form 1040-NR instead, and only when they have US-source income. Owning shares in a US company does not by itself create a personal filing obligation.

Foreign currency spend is recorded at the rate on the transaction date and revalued where required, which is what produces exchange gains and losses in your accounts.

Netting them away hides real movement in your margins. Our guide to multi-currency accounting covers the mechanics.

Software categorises transactions and imports bank feeds. It does not decide how to treat a prepaid annual contract, a SAFE, or deferred revenue.

Those judgment calls are what a bookkeeper or accountant adds. The common failure is a clean-looking ledger with a balance sheet nobody has ever reconciled.

Dissolution is the state filing that ends the company. Winding up is the work around it — settling debts, notifying creditors, and distributing any remaining assets, both before and after that filing.

Equity documents, the cap table, prior-year returns, foreign ownership details, loan agreements, and anything affecting basis or elections.

Your books record what happened to cash. The return needs the legal picture behind it, which usually lives in a different folder.