Every US person, including corporation, LLC, trust, partnership or anything or anyone that calls the US home under tax law has an obligation to report bank or financial accounts if the total of these accounts exceeds USD 10,000. The actual terminology used by the IRS is rather convoluted, but if you or your company is US resident, you have to file this form so the IRS can receive it before June 30, 2010. “Accidental” failure to file on time can lead to a $10,000 penalty, and intentional nonfiling can lead to a 50% of your highest account balance or $100,000 penalty.

We’ve put together this year’s edition of the instructions that SHOULD have been provided with the form. Follow this link to download FBAR instructions.

Looking for funding for your startup? You’ll need to state the basic value proposition for your business. Here a summary of what the angel investors and venture capitalists would like to see – no more no less:

1. your team
2. what your product/service does
3. what issue/pain is it looking to solve/address
4. what is the solution
5. what is the addressable market
6. what is the competitive landscape
7. any current customer/client/pilot pipeline
8. what is the revenue stream/source
9. what are your financial projections
10. how much are you looking for in investment
11. what will you do with the money, how will it be spent

With this information, they will know whether to call you for detailed information, or move on to the next proposal. If you can’t pull this information together, it’s time to seek out someone who can.

Talk of social media and Twitter is all the rage now, and yet a majority of Twitter users bail out within months. If you’ve heard of Twitter but didn’t know what it was or how to use it, check out this article: Twitter for small business.

There is a lot discussion among entrepreneurs and their advisers about whether one should simply start a business alone, or find one or more co-founders who can bring additional talents and resources to the table. Jobs and Wozniak, Bill Gates and Paul Allen, the list goes on and on of situations where there was a builder and a visionary.

This article takes a look into this question and you can decide what’s right or wrong: Do you need a co-founder?

Thanks to Kaiser Wahab and his firm, Wahab and Medenica, for providing this incisive blog post with examples of what to do and not do to preserve your limited liability status. <a href=”http://wrlawfirm.com/BlogWP/featured_business_legal_articles/your-business-your-llc-your-baby-properly-managing-an-llc-to-avoid-losing-your-liability-protection/”>Manage Your LLC to Avoid Losing Your Limited Liability Status</a>

There’s so many resources available now for entrepreneurs, especially in the US and Western Europe. Here is one collection: Small Business Resources

The perennial question of an entrepreneur is asked and answered thanks to the @startuplawyer. When is the right time to incorporate quiz

Did you know…
…that, in Ireland, the most common Director firstname is John and surname is Murphy? Or that the most common Director star sign is Cancer and the most common Director postcode is Dublin 4? So if you’re name is John Murphy, you live in Dublin 4 and have a birthday sometime between 22nd June and 23rd July…it looks like you’re destined to be a Director of a company…if you believe in that sort of thing!

This is from the IRS website:

Q. A non resident alien who doesn’t meet the 183 day test is a partner in a US partnership where the US partnership deals with rentals; must he file an FBAR?

A. With the October 2008 revision to the FBAR form and instructions, FBARs are now required by nonresidents who are in, and doing business in, the United States. Whether a person is a nonresident alien for tax purposes has no bearing on the person’s FBAR reporting obligation. The domestic partnership may have to file FBARs if it has a financial interest in, or signature authority (or other authority that is comparable to signature authority), over a financial account that is located in a foreign country. Whether a person is considered to be in, and doing business in, the United States is determined based on an analysis of the facts and circumstances of each case. Generally, a nonresident is not considered to be in, and doing business in the United States for FBAR reporting purposes if he only holds a partnership interest in a domestic partnership.

OK, so what does this mean? The above case says that the non-resident, with just a partnership interest in a US partnership, doesn not have to disclose all his foreign (non-US) bank and financial accounts to the US Treasury; but, by extension: Suppose you are a Canadian corporation; you send salespeople on a regular basis to clients in Buffalo and Detroit. Somewhere between 2 trips a year and opening a full time office, a line gets crossed, and your Canadian bank accounts must be reported to the US Treasury Dept by the following June 30, or face steep fines AND IMPRISONMENT for the officers and directors of the company:

Q. What happens if an account holder is required to file an FBAR and fails to do so?

A. Failure to file an FBAR when required to do so may potentially result in civil penalties, criminal penalties, or both. If you learn you were required to file FBARs for earlier years, you should file the delinquent FBAR reports and attach a statement explaining why the reports are filed late. No penalty will be asserted if the IRS determines that the late filings were due to reasonable cause. Keep copies, for your record, of what you send.

What to do if you are in this situation?

Q. How do foreign account holders report their accounts to the IRS?

A. The holders report their foreign accounts by completing boxes 7a and 7b on Form 1040 Schedule B and completing Form TD F 90-22.1

This year, The Wharton School (perennial competitor to my alma maters, Columbia Business School and London Business School) has again generated some interesting ideas in its annual Business Plan Competition: Article

This year, hi-tech ideas have yielded ground compared to

This year’s competition had 168 entries, showing the huge involvement of the student body of the University of Pennsylvania even in these tough economic times. As the article says:

This year, with the economy in disarray, business plans from the “Great Eight” finalists played the field, with products ranging from a new training machine for crew teams to artificial eyes that dilate to a noninvasive way of measuring blood sugar levels.

Venture funding is drying up quickly, and what is out there is so expensive as to attact only the most desperate. In spite of this, these contestants gave it their all to compete for the $70,000 in funding.

What does all this mean? If you are considering starting a business, it’s still not a bad time to start, but be careful of where your funding is coming from! Plan carefully and think through what you want to do and how you will earn more than your cost of doing business. Master these critical matters and your business will do well in bad times or good times.