CA Franchise Tax Board’s Guide & IRS to:
Common Forms of Ownership
- Choose a business structure. The form of business determines which income tax return a business taxpayer needs to file. The most common business structures are:
- Sole proprietorship: An unincorporated business owned by an individual. There’s no distinction between the taxpayer and their business.
- Partnership: An unincorporated business with ownership shared between two or more people.
- Corporation: Also known as a C corporation. It’s a separate entity owned by shareholders.
- S Corporation: A corporation that elects to pass corporate income, losses, deductions, and credits through to the shareholders.
- Limited Liability Company: A business structure allowed by state statute.
- Choose a tax year. A tax year is an annual accounting period for keeping records and reporting income and expenses. A new business owner must choose either:
- Calendar year: 12 consecutive months beginning January 1 and ending December 31.
- Fiscal year: 12 consecutive months ending on the last day of any month except December.
- Apply for an employer identification number. An EIN is also called a federal tax identification number. It’s used to identify a business. Most businesses need an EIN.
- Have all employees complete these forms:
- Pay business taxes. The form of business determines what taxes must be paid and how to pay them.
Taxpayers interested in starting a business can find information for some industries on the Industries/Professions Tax Centers webpage. Each state has additional requirements for starting and operating a business. Prospective business owners should visit their state's website for info about state requirements.
- Small Business Admiration’s 10 steps to start your business.
What documents do I need to show I’m really a bonafide Business?
Health Care Reform – AB 1083 pretty much has the SAME requirements to prove that your business, is a bonifide Employer, with bonified common law employees and owner’s who are really working 30+ hours, the same as before under AB 1672.
SHOP’s Employer application on page 2 has a nice simple matrix to show you what documents are needed for each type of business structure, propritorship, corporation, llc, etc. Please send, (email, fax or 1st class mail) those to us for review to help you make sure you qualify.
Since the Insurance Companies we represent are MANDATED by AB 1672 AB 1083 to write any Bonafide EmployER with 2 or more eligible employees, including husband and wife, and part timers, they require absolute proof that the business is really there and running, though in this economy a profit is not required.
On this page and those below it, are typical Requirements, by type of business structure, to show that your business, working owners who must sign a statement under penalty of recession and employees really exist.
If ALL your employees are on payroll, there is generally nothing to prove, just send your DE 6 or 9.
Please do not call and ask us “what if” questions. Just send us all your paperwork, for the type of business structure that you have. We can then double check if the companies will accept it.
(Kaiser) Flow Chart
Specific Requirements by Insurance Company:
Excerpt of Owner in Biz Form
I attest that while I am not listed on the DE-6 or 9 wage report of this company, ALL of the following conditions are true:
1. I am a sole proprietor, partner, corporate officer or LLC manager/member of the company name indicated below; and
2. I am actively at work at this company working a minimum of 20 hours per week on a permanent and full-time basis; and
There must be at least ONE non spousal employee working 30 hours. See Insurance Code 10700 f for more detail
3. I draw wages, dividends or other distributions from this company on a regular basis; and
4. I do not derive substantial earned income from any other employer and am not eligible for other employer-sponsored coverage; and
See Insurance Code 10700 f for more detail
Reference - Please check with us on latest AB 1083 Requirements
Warner Pacific 411 Broker ONLY
- DE 9 – Payroll Tax Reporting
- IRS Definition of a Business
- LLC Proofs
- No Tax Forms?
- Partnership – Proofs
- Qualification Procedures
- Sole Proprietor
Broker ONLY – Warner Pacific Carrier 411