Two questions I got by email and then my questions for the group.
I have a non profit corporation that I set up two years ago. Due to a myriad of circumstances, I have never established a checking account nor taken in one penny with or for this corporation. The company has no assets period. I pay the $20 to the NC Dept. of State each year to keep the corporation alive because it cost $500 for the incorporation and I believe the need for it will soon come. Because there are no assets nor activity, I have not filed a federal or state return for the corporation. The NC Dept. of Revenue sent me a letter wondering where my return for this corporation was for 2006. There are several options on the form for reply and I want to be sur it is sent back correctly.
I have a second S corporation that I established to serve as a "Holding" account for players fees to play from each season. I use this account to pay referees, tournament fees etc. There has never been more than $2,000 in a any entire year in the account for this company. Again, because of the nature of the transactions and the amount, I have not filed for this corporation. Again the state wants to know why not and I want to be sure we send it back correctly.
1. Is the described use of the S Corp appropriate? What if he is also conducting his coaching in some way through the S Corp? Is he allowed to have the S Corp pretty much break even and not pay him anything? Wouldn't a Nonprofit be a more appropriate entity for an activity not engaged in for profit? If literally all he is doing is holding and disbursing player moneys why would not a simple non interest bearing checking account be the way to go? Since he has an S Corp should he not report all the money coming in and out in the same way as if he was hoping to make a profit?
2. I know that the S Corp is required to file Federal and State returns each year. Isn't the Nonprofit also supposed to file paperwork each year?
Thanks for any help.
I have a non profit corporation that I set up two years ago. Due to a myriad of circumstances, I have never established a checking account nor taken in one penny with or for this corporation. The company has no assets period. I pay the $20 to the NC Dept. of State each year to keep the corporation alive because it cost $500 for the incorporation and I believe the need for it will soon come. Because there are no assets nor activity, I have not filed a federal or state return for the corporation. The NC Dept. of Revenue sent me a letter wondering where my return for this corporation was for 2006. There are several options on the form for reply and I want to be sur it is sent back correctly.
I have a second S corporation that I established to serve as a "Holding" account for players fees to play from each season. I use this account to pay referees, tournament fees etc. There has never been more than $2,000 in a any entire year in the account for this company. Again, because of the nature of the transactions and the amount, I have not filed for this corporation. Again the state wants to know why not and I want to be sure we send it back correctly.
1. Is the described use of the S Corp appropriate? What if he is also conducting his coaching in some way through the S Corp? Is he allowed to have the S Corp pretty much break even and not pay him anything? Wouldn't a Nonprofit be a more appropriate entity for an activity not engaged in for profit? If literally all he is doing is holding and disbursing player moneys why would not a simple non interest bearing checking account be the way to go? Since he has an S Corp should he not report all the money coming in and out in the same way as if he was hoping to make a profit?
2. I know that the S Corp is required to file Federal and State returns each year. Isn't the Nonprofit also supposed to file paperwork each year?
Thanks for any help.
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