An individual who is not a professional or resident of the United States may not qualify as a sole proprietor for purposes of the US tax law (section 5 Shibler). A business is defined as any entity or individual engaged in commercial, investment, or administrative activities for profit. Businesses may be either for-profit corporations or non-for-profit organizations that work to meet a social cause or further a charitable purpose. A US citizen can form a corporation, but only if the corporation is not a company organized under the laws of the United States. It must be recognized by the United States customs and should register its name under the laws of the state in which it is established.
One of the most important aspects of a business is its profit or income. Profits are usually the basis for all other assessments of a business’s capital structure. Common types of measurements of profits include gross revenue and net revenue. Other measures of profits are the extent of assets (in the case of publicly traded corporations), the extent of liabilities, and net worth. All of these measurements are used to determine the value of the company.
Dividends are payments made by a corporation to its shareholders, in order to dividend on their shares in the profits of the corporation. Payments may be annual or semiannual, and shareholders may choose to receive payment in cash, stock options, or paid dividends in addition to or in place of regular income payments. A corporation may also pay dividends to its registered agents on behalf of its shareholders. All dividends are reported to the IRS in the corporation’s balance sheet, and the corporation must file its tax returns with the IRS.