What are Nominee Director Services? Who is a Nominee Director? Why do I need these services?…

Who is a Nominee Director?

A Nominee Director is an individual who acts as a company’s director for the purpose of fulfilling the legal requirement to have a director and perhaps to protect the identities of the persons actually controlling the company.  A Nominee Director is intended to facilitate the beneficial owner in matters of privacy. In certain jurisdictions there is a requirement to identify on the public record the details of the entity’s directors. In such cases the benefits of anonymity can only be achieved through the use of third party professional director.  By using a “Nominee” the names of the entity’s beneficial owners are neither on the record nor disclosed to any third party.

Who can appoint the Nominee Director?

New and existing entities can appoint a Nominee Director.

• For a new entity, there will be an agreement between the owner of the Company and the Nominee Director (or) the company which is rendering the Nominee service. The Agreement will also contain the responsibilities and the liabilities of the nominee director.
• For an existing entity, the nominee director will be appointed only after the approval by the Board of Directors. An agreement will then be signed by the entity and Nominee service provider, Nominee Director on its Board. The tenure of the nominee director will be fixed at the time of appointment.

The nominee director so appointed will not have any voting rights in the meetings held by the entity.

Why could someone need a Nominee service for the Business needs?

There are two reasons for going for this service, they are:

• An individual who does not want to disclose their identity as an owner of an organization.
• Individuals who does not have SSN (Social Security Number) and want an EIN, as it is mandatory to use SSN in the application.

Nominee Services For “Obtaining Ein” & “Nominee Director”

In today’s busy world, most of us would like to simplify our lives. One easy way to do this is by using the Nominee services for the new or existing business. The most popular nominee services in USA are “Nominee service only to obtain EIN” & “Nominee service only as nominee director with authority to write checks or sign documents.”

Nominee Service for obtaining EIN:

Nominee service EIN is designed only for the purpose obtaining the Federal Tax ID number with an agreement between the two parties. The Nominee’s SSN will be used on the application to obtain EIN and once EIN is received, the nominee will resign and the beneficiary/owner will take over the entity.

Nominee service EIN is provided to Corporation, LLC, Partnership and sole-proprietors who plan to have employees. This service is not available for LLC’s or S-Corporations which are taxed as partnerships or as an individual.

What is EIN?

EIN (Employer Identification Number) is also known as Tax ID (Tax Identification Number) which is issued by IRS. The EIN is a nine digit number (in xx-xxxxxxx format) which constitutes, to some extent, the social security number of the company.

EIN has to be applied usually after a new business is started. Any individual needs an EIN for starting a new business like Corporation, LLC, Partnership or plan to have employees. EIN is also required for opening a bank account for the company.

Nominee director with authority to write checks or sign documents:

Some corporations may need nominee directors for signing their checks or tax returns since they may be international owners / founders. This provides them the flexibility of operating their business irrespective of their geographical location in the globe. Nominee Directors with authority to write checks, etc do need to enter in a special agreement with the owners to waive the liability arising out of signing.

Responsibilities and Liabilities of a Nominee Director:

• Such directors are in name only and have no other responsibilities and powers.
• Nominee Director(s) are not responsible for and will not make any decisions whatsoever in connection with the management of the entity.
• Nominee Director(s) will neither be identified, nor can sign entity documents nor can sign returns on behalf of the entity.
• The beneficial owner is fully responsible for financial, legal and in all other aspects for the operation of the entity.
• The nominee will not have any liabilities as he will neither be signing any contract on behalf of the entity nor signing up for obtaining a Bank Account.
• The Nominee Director cannot and will not enter into any business contract or financial or moral commitment.

 

ICS, Inc. – the makers of www.mybizfiler.com does provide Nominee Services and a representative as Nominee Director. Kindly visit our website or write to sales@mybizfiler.com for more details.

ICS, Inc (www.mybizfiler.com) offers a wide range of services typically offered by a Big 5 Accounting firm and a CPA firm in the U.S. ICS offers Incorporation, Book Keeping, Payroll Services, HR & Business Consulting etc.  Contact ICS today at    203 437 4083   , e-mail – sales@mybizfiler.com, or by accessing 24/7 chat page on www.mybizfiler.com.

The contents of this post are personal statements or opinions expressed by Priyanka Kosigi, Manager of ICS, Inc. who has written the article and by Padmaja Nallamotu, Manager of IBSN Global Inc. who has assisted and supported the article. They must not be construed as financial, investment or taxation advice.

Can a Resident Alien, Work Visa holder form a Business Entity in US?

Most of the resident or non-resident aliens who are aspiring to start a business in US have questions on their eligibility of doing so. The most common question comes to their mind is with their current visa status, can they incorporate a business entity like a Corporation or LLC? Here are the answers….

 

A resident or non resident alien can form a business entity in US however it depends on the entity types, and subject to fulfillment of immigration requirements.

 

For instance H1 and H-1B visa holders who work for a company can form a business entity in US however they cannot receive salary from the same entity. They cannot form an employee employer relationship with any other entity until they get a petition from the current employer to work with other companies and get their H1 or H-1B issued from the new entity. However, the new entity should be eligible to do so.

 

F1 Visa holders can also create a business entity, but need to form in the name of the person who has a valid visa. They can make investments in the business and can share profits.

 

An individual with a valid EAD can also start a business and work. EAD allows one to work as an employee and collect salary from the company.

 

The important point to note here is that a resident or non-resident alien can form LLC, C Corporation but not S Corporation. A shareholder of S Corporation must be either US citizen or a Green Card holder. The best way to determine the type of entity and the incorporation process is to consult www.mybizfiler.com or an attorney.

 

As a conclusion it can be said that best way one can benefit from a business with out having GC or EAD is to become an owner, employer, investor and derive profits even though by not having physical presence in US!.

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• VISA- H1
  • Description – Non- Immigrant visa established by USCIS, to employ workers with specialized training
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No
  • Explanation – You can very well form a business but you cannot work for the company but can share profits

 

• VISA- H-1B
  • Description – Non- Immigrant visa established by USCIS, to employ workers with specialized training
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No
  • Explanation- You can very well form a business but you can also work for the different employers only when all employers must have filed an H-1B petition for you.

 

• VISA- H4
  • Description- The H-4 Dependent Visa allows the dependent spouse and children of any principal H-class visa holder’s entry to the United States and free travel in and out of the country.
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No

 

• VISA- F1
  • Description- The F-1 visa is a non-immigrant, full-time, student visa that allows foreigners to pursue education in the United States
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No
  • Explanation- You can start a business when you are on f1 visa. But, you have to start on other person’s name who is having a valid visa (who can work legally and earn income).You can put the investment (partnership) and you can take the partnership in the property. For example start a business with your current owner and put some investment in the business and take the percentage in the property.

 

• VISA- F1-OPT
  • Description- Persons seeking to pursue a full course of study at a school in the United States may be eligible for a visa for the course of their study plus, in some cases, a period for practical training in their field of study.
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No
  • Explanation- With OPT, you can work in your own company, provided that the company is active in your field of study. The OPT does NOT allow you to work in a company, even your own, if the work is not in your field of study. It is called Practical Training for a reason.

 

• VISA- B1
  • Description- Available to all visitors coming to U.S for business or pleasure. B-1 business visitor visas are for a short duration and must not involve local employment
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No
  • Explanation- If you are simply going to invest and start up a business in the US and hire people to run it and you will not be working it yourself (more of an investment rather than employment), you can do so at anytime and come as a visitor to check things out, meetings etc. If you are actually going to be involved in the business in the US you should be looking at the E-2 visa.

 

• VISA- L1
  • Description- Temporary visa that allows companies in USA & other countries to transfer certain classes of employees from its foreign operations for up to seven years. The employee must have worked for a parent, affiliate, subsidiary, or branch office of the U.S. Company outside of the USA for at least one year out of the last three years.
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No
  • Explanation- L1 Visa holder can incorporate business. This type of visa allows an executive or manager to come to the U.S. to establish a new business

 

• VISA- Employment Authorization Document (EAD)
  • Description- an Employment Authorization Document (EAD), EAD card, known popularly as Work Permit, is a document issued by United States Citizenship and Immigration Services (USCIS) that provides its holder a legal right to work in the United States of America. It should not be confused with the green card. EAD has fewer employment and immigration-related privileges than the green card.
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No                
  • Explanation- You can start and work for your business with a valid EAD. The only difference is that you can work for the company and collect salary. What EAD does allow you is to work as an employee of the company. So, technically, you can start a business even on H1 or B1/B2. The only way one can benefit from a business one owns without a GC or EAD is by becoming an investor. Investment income from a business you own is legal all the time, even if you live outside the US.

 

• Green Card Holder
  • Description- A Green Card is a Permanent Visa to USA. Green Card gives you the status of permanent resident and legal rights to work in United States
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- Yes
  • Explanation- You can very well form a business

 

• US Citizen
  • Description- US citizenship can be acquired by birth or by the process of naturalization. The process of an immigrant becoming a US citizen is termed as ‘naturalization’. If you are not born in the US, you have to naturalize to become a US citizen.
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- Yes
  • Explanation- You can very well form a business

 ICS, Inc (www.mybizfiler.com) offers a wide range of services typically offered by a Big 5 Accounting firm and a CPA firm in the U.S. ICS offers Incorporation, Book Keeping, Payroll Services, HR & Business Consulting etc.  Contact ICS today at    203 437 4083   , e-mail – sales@mybizfiler.com, or by accessing 24/7 chat page onwww.mybizfiler.com.

The contents of this post are personal statements or opinions expressed by Nirmal Jain Senior Manager , ICS Inc. They must not be construed as financial, investment or taxation advice.

 

 

 

What is IFRS and why are global economies looking at one accounting standard?

What is IFRS?

International Financial Reporting Standards (IFRS) is a set of accounting standards, developed by the International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements.

 

Worldwide Adoption of IFRS  

From the past few years many changes have been seen by many in finance and accounting sectors. Today it is observed that many major economies in the world are under way to adopt IFRS. Nearly 100 countries have adapted their local accounting standards to conform to IFRS.

 It is under practice that many nations developed their own local Generally Accepted Accounting Principles (GAAP). The advent of IFRS has brought with it the choice of adopting a globally accepted set of standards instead of using local GAAP.

 

 But why is IFRS so important and why is convergence of accounting standards so advantageous or even necessary?

 International Financial Reporting Standards remove some of the subjectivity from financial reporting and provide a consistent basis for recognition, measurement, presentation and disclosure of transactions and events in financial statements. In recent Past, there have been cases where companies reporting under IFRS in Europe record a loss but when these same companies re-state their accounts according to US GAAP they record a profit!

 Financial statements are prepared based on a number of accounting principles and assumptions. Accountants use their judgment to apply these principles and produce financial statements for use by management, shareholders, analysts, finance providers, governmental agencies, the general public and other stakeholders.

 

Why is the World looking at IFRS?

 Convergence of accounting standards will have the effect of attracting investment through greater transparency and a lower cost of capital for potential investors. In recent times Companies are finding it increasingly difficult to raise money and get them listed on stock exchanges as they were not following the standard in accordance with IFRS. Differences in accounting practice make it difficult for investors, whether individual or institutional, to compare the financial results of different companies and make investment decisions.

 

 To Whom It Benefits

 Multinational companies will find it easier to comply with reporting requirements of overseas stock exchanges since they would no longer have to re-state their accounts.

Governments will be in a better position to assess the tax liabilities of multinational companies receiving income from overseas as well as for foreign multinationals setting up shop in their own country.

 In 2005 the European Union formally adopted IFRS as the single accounting standard throughout their member countries. Australia, Russia, China, South Africa and the GCC nations have already converged or are in the process of converging with IFRS. Canada has committed to adopting IFRS by 2011. Japan, India, Brazil and Mexico are also pursuing convergence or adoption of IFRS.

 In 2007 the US Securities & Exchange Commission made the landmark decision to allow non-US companies to file their financial statements based on IFRS without reconciling back to US GAAP. This is widely regarded as the most significant step by the SEC towards full adoption of IFRS in the not too distant future. This change by the SEC is an effort to reduce the barriers to capital flows between countries using IFRS and US GAAP.

 The IASC expects that by 2011 more than 150 countries will have adopted IFRS including the US which is expected to at least have converged with IFRS to a great extent either by changing US GAAP or adopting IFRS outright.

 

 Who gets affected by the change?

 A country’s intention to adopt IFRS or converge with IFRS is highly admirable and to be applauded. However, the accounting profession, governments, regulators, national accounting standard setters, and other constituents must continue to work together to eliminate differences between national and international standards. The principal actions needed to support convergence are outlined below.

 v The Accounting Profession needs to assist governments and standard setters in formulating and  enacting convergence plans, provide IFRS training and education and support the preparation of national  language translations of IFRS.  

 v Governments must establish formal convergence plans that include target dates for implementation and address impediments to convergence, for example the link between financial accounting and lax legislation.

 v Regulators should set up efficient and effective enforcement mechanisms to increase the consistency and quality of application of IFRS as well as support the International Financial Reporting Interpretations Committee (IFRIC) and the IASB as the sole clearing house for interpretation of IFRS.

 v National Standard Setters must decide on a strategy and timetable for achieving convergence and develop an active standard setting agenda aimed at eliminating existing differences with IFRS.

 v The IASB is required to address concerns about the complexity and operational practicality of IFRS, prioritize the SME project as an agenda item and oversee and authorize translations of IFRS in various languages.

 v The Preparers of financial statements must actively participate in the standard setting process, in particular to identify practical application concerns, as well as providing IFRS training for staff and managers, including those in non-financial roles.

 v Universities need to include IFRS in the core accounting curriculum.

 v Analysts and Investors are required to promote convergence of national accounting standards with IFRS. They should also actively participate in the IASB’s standard setting process, in particular to identify users’ needs, and educate their staff regarding the IFRS reporting model.

 

SEC offers roadmap to global accounting standards

 The Securities and Exchange Commission has proposed roadmap that could lead to the use of international financial reporting standards (IFRS) by U.S. issuers beginning in 2014. Currently US Companies are using US Gaap. In 2011 SEC would make a final decision whether to adopt IFRS.

“An international language of disclosure and transparency is a goal worth pursuing on behalf of investors who seek comparable financial information to make well-informed investment decisions,” said SEC Chairman Christopher Cox. “The increasing worldwide acceptance of financial reporting using IFRS, and U.S. investors’ increasing ownership of securities issued by foreign companies that report financial information using IFRS, have led the SEC to propose this cautious and careful plan. Clearly setting out the SEC’s direction well in advance, as well as the conditions that must be met, will help fulfill our mission of protecting investors and facilitating capital formation.”

My Opinion

 The transition from GAAP to IFRS is not only inevitable, but a positive development that would help make capital markets more competitive. Transitioning to IFRS would allow companies to compete for capital in other countries, while reducing cost and complexity for companies operating internationally; we also think that embracing a single set of global accounting standards would contribute to a higher degree of investor understanding and confidence. Also IFRS is very important for US Investors as they own 2/3 rd of securities issued by foreign companies. Because of IFRS there will be greater comparability and greater confidence in the transparency of financial reporting for the US investors  

 

ICS can help you and your business. ICS, Inc (www.mybizfiler.com) offers a wide range of services typically offered by a Big 5 Accounting firm and a CPA firm in the U.S. ICS offers Incorporation, Book Keeping, Payroll Services, HR & Business Consulting etc.  Contact ICS today at 203 437 4083, e-mail – sales@mybizfiler.com, or by accessing 24/7 chat page on www.mybizfiler.com

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The contents of this post are personal statements or opinions expressed by Winni Sharma, Senior Manager, ICS Inc. They must not be construed as financial, investment or taxation advice.

 

Did you know? There are more than 5.5 million Small Businesses in the US!!

America is a country made of Entrepreneurs, a country that that believes in Free trade, and a country where talent meets success. If 5.5 million business owners have made a difference by setting up their own businesses in US, what are you waiting for, why not put your talent, and hard work to make money for yourself? 

Below is the Statistics on number of businesses (State-wise) in the US. 60% of these businesses have less than 5 employees –  

State	Number of Businesses	State	Number of Businesses
Alabama	83,319	Maryland	74,730
Alaska	23,796	Massachusetts	123,314
Arizona	85,384	Michigan	177,845
Arkansas	61,078	Minnesota	103,333
California	701,876	Mississippi	50,196
Colorado	110,844	Missouri	117,469
Connecticut	75,270	Montana	35,837
Delaware	15,183	Nebraska	42,204
District of Columbia	8,832	Nevada	42,634
Florida	375,543	New Hampshire	31,059
Georgia	165,810	NewJersey	149,214
Hawaii	29,452	NewMexico	43,986
Idaho	36,739	NewYork	293,878
Illinois	206,838	North Carolina	170,956
Indiana	104,176	North Dakota	18,334
Iowa	67,253	Ohio	192,243
Kansas	62,037	Oklahoma	79,088
Kentucky	68,812	Oregon	85,907
Louisiana	88,294	Pennsylvania	230,835
Maine	31,788	Rhode Island	20,654
South Carolina	85,821	Virginia	113,192
South Dakota	19,044	Washington	124,979
Tennessee	109,389	WestVirginia	27,427
Texas	396,060	Wisconsin	125,384
Utah	41,623	Wyoming	18,098
Vermont	17,181

 

ICS can incorporate your busines, and take on all the mundane work such as Book Keeping, payroll processing, financial analysis, so that you can focus on your business. All these services delivered at 1/4th the price that a typical CPA office charges. I heard you saying, WHAT, Is that possible? The answer is, Yes, our Delivery excellence is the one that enables us to offer quality service at lower than affordable price!

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The contents of this post are personal statements or opinions expressed by Co-Founder, President & CEO, ICS Inc. They must not be construed as financial, investment or taxation advice. ICS, Inc (www.mybizfiler.com) offers a wide range of services typically offered by a Big 5 Accounting firm and a CPA firm in the U.S. ICS offers Incorporation, Book Keeping, Payroll Services, HR & Business Consulting etc.  Contact ICS today at      203 437 4083     , e-mail – sales@mybizfiler.com, or by accessing 24/7 chat page on www.mybizfiler.com.