It all begins with an idea. Maybe you want to launch a business. Maybe you want to turn a hobby into something more. Or maybe you have a creative project to share with the world.

When a partnership is formed, the partners contribute money, other property, or services in return for their ownership interest. A partnership is a flow-through entity, which means that the income is taxed only once when it “flows through” to the partner. Subchapter K rules of the Internal Revenue Code.

Small, closely held corporations may elect to be taxed as an S Corporation. It flows through the entity and taxed at a similar manner to partnerships. The individual owners are taxed on their proportionate share of the S corporation earnings regardless of whether the earnings are distributed to them.

Corporations, like other taxable entities, often seek to minimize the taxes paid to governments in order to retain that ash for internal investment, shareholder payout, debt payments, or other purposes. There is no gain or loss recognized by the corporation issuing stock in exchange for property in the following transactions: Formation, Reacquisition of treasury stock and Resale of treasury stock.

As of January 1, 2024, the bipartisan Corporate Transparency Act, enacted in 2021 to curb illicit finance, requires many companies doing business in the United States to report information to the Financial Crimes Enforcement Network (FinCEN) about the individuals who ultimately own or control them. FinCEN is a bureau of the U.S. Treasury Department.

Companies that are required to comply (“reporting companies”) must file their initial reports by the following deadlines:

Existing companies: Reporting companies created or registered to do business in the United States before January 1, 2024 must file by January 1, 2025.

Newly created or registered companies: Reporting companies created or registered to do business in the United States in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.

Beginning in 2025, newly created or registered companies will have 30 days