Question 1

Articles of Organization (or Certificate of Formation)

Accepted Answer

Definition:Articles of Organization, also known in some states as the Certificate of Formation, is the official legal document filed with a U.S. state government to legally form a Limited Liability Company (LLC).

This document includes essential ...

Question 2

Brex

Accepted Answer

Brex is a fintech solution that provides expense management tools and virtual corporate cards for startups. While ideal for funded companies, it requires a strong U.S. presence and may not suit all non-resident founders.
...

Question 3

C-Corp (C-Corporation)

Accepted Answer

Definition:A C-Corporation (C-Corp) is a standard legal entity type in the United States that is separate from its owners and shareholders. It offers strong liability protection, unlimited growth potential through stock issuance, and is commonly use...

Question 4

ECI (Effectively Connected Income)

Accepted Answer

Definition:ECI, or Effectively Connected Income, refers to income that is connected with the conduct of a trade or business in the United States. For tax purposes, this classification is used by the IRS to determine which portion of a foreign person...

Question 5

EIN (Employer Identification Number)

Accepted Answer

Definition:An EIN (Employer Identification Number) is a unique 9-digit number issued by the Internal Revenue Service (IRS) to identify a business entity for federal tax purposes. It is also referred to as a Federal Tax ID. Think of it as the busines...

Question 6

ETBUS (Engaged in a Trade or Business in the USA)

Accepted Answer

Definition:ETBUS stands for Engaged in a Trade or Business in the United States. It is an IRS-defined status that applies to non-U.S. persons (including foreign-owned LLCs or corporations) who are actively conducting business within the United State...

Question 7

Form 1040-NR (U.S. Nonresident Alien Income Tax Return)

Accepted Answer

Definition:Form 1040-NR is the U.S. federal tax return used by nonresident aliens (NRAs) to report income that is subject to U.S. income tax. If you are not a U.S. citizen or resident for tax purposes but earned income from U.S. sources such as thro...

Question 8

Form 1065 (U.S. Return of Partnership Income)

Accepted Answer

Definition:Form 1065 is the U.S. federal tax return used by partnerships, including Multi-Member LLCs (MMLLCs), to report the business’s income, gains, losses, deductions, and other financial information to the IRS. The partnership itself does not p...

Question 9

Form 1120 (U.S. Corporation Income Tax Return)

Accepted Answer

Definition:Form 1120 is the U.S. federal tax return filed annually by C-Corporations to report their income, gains, losses, deductions, and tax liability to the Internal Revenue Service (IRS).

For foreign-owned entities, Form 1120 is also used in...

Question 10

Form 5472 (Information Return of a 25% Foreign-Owned U.S. Corporation)

Accepted Answer

Definition:Form 5472 is an IRS information return required to be filed by certain U.S. companies that are 25% or more foreign-owned, including Single-Member LLCs (SMLLCs) that are disregarded entities and owned by non-U.S. persons.

This form is u...

Question 11

Form W-8BEN and Form W-8BEN-E

Accepted Answer

Form W-8BEN and Form W-8BEN-E are IRS forms used by non-U.S. persons to certify their foreign status and claim tax treaty benefits on U.S.-source income, such as interest, dividends, royalties, or service payments.

Form W-8BEN is used by individ...

Question 12

IRS (Internal Revenue Service)

Accepted Answer

Definition:The IRS (Internal Revenue Service) is the United States federal agency responsible for enforcing tax laws and collecting federal taxes. It operates under the U.S. Department of the Treasury and plays a central role in processing tax retur...

Question 13

ITIN (Individual Taxpayer Identification Number)

Accepted Answer

Definition:An ITIN (Individual Taxpayer Identification Number) is a 9-digit tax processing number issued by the IRS to individuals who are not eligible for a Social Security Number (SSN) but need to comply with U.S. tax laws. It always begins with t...

Question 14

LLC (Limited Liability Company)

Accepted Answer

Definition:An LLC, or Limited Liability Company, is a U.S. business entity type that offers limited personal liability protection and flexible tax treatment. It is a popular choice among both U.S.-based and non-resident entrepreneurs due to its ease...

Question 15

MMLLC (Multi-Member LLC)

Accepted Answer

A Multi-Member LLC (MMLLC) is a Limited Liability Company with two or more owners, known as members. Like all LLCs, it offers limited liability protection, shielding the personal assets of members from business debts and lawsuits.

By default, the...

Question 16

Member (of an LLC)

Accepted Answer

A Member is an owner of a Limited Liability Company (LLC). LLCs can have one or more members, depending on their structure (e.g., Single-Member LLC or Multi-Member LLC). A member can be an individual, another company, or even a foreign entity.

Me...

Question 17

Mercury Bank

Accepted Answer

Mercury is a modern, digital-first banking platform built specifically for startups, tech companies, and remote founders. Unlike traditional banks, Mercury operates entirely online and offers a sleek dashboard, FDIC-insured checking and savings acco...

Question 18

NRA (Non-Resident Alien)

Accepted Answer

Definition:In the context of U.S. taxation and business formation, an NRA (Non-Resident Alien) is an individual who is not a U.S. citizen and does not meet the IRS criteria for residency (Green Card Test or Substantial Presence Test). NRAs are subje...

Question 19

Nexus in U.S. Taxation (Physical and Economic Nexus Explained

Accepted Answer

Definition:Nexus refers to a legal connection or link between a business and a U.S. state, which gives that state the authority to require the business to collect and remit state sales tax or pay state income tax. There are two primary types:

Ph...

Question 20

Operating Agreement

Accepted Answer

Definition:An Operating Agreement is an internal legal document that outlines the ownership structure, management procedures, and operating rules of a Limited Liability Company (LLC). While not always legally required by state law, it is a foundatio...

Question 21

Payoneer

Accepted Answer

Payoneer is an international payment platform that offers virtual U.S., UK, and EU bank details for freelancers and businesses to receive payments. It’s a powerful tool for non-U.S. entrepreneurs working with clients or marketplaces based in the U.S...

Question 22

Paypal

Accepted Answer

PayPal is a globally recognized online payment platform that allows businesses and individuals to send, receive, and manage money securely across borders. It supports various payment methods, including credit/debit cards, PayPal balance, and bank tr...

Question 23

Registered Agent

Accepted Answer

Definition:A Registered Agent is a designated individual or company authorized to receive official legal and tax documents on behalf of a U.S. business entity, such as an LLC or C-Corporation. This includes service of process (lawsuits), compliance ...

Question 24

Relay Financial

Accepted Answer

Relay is a U.S.-based digital banking platform for small businesses. It integrates well with accounting tools and supports U.S. LLCs owned by non-residents with an EIN and U.S. address.
...

Question 25

SMLLC (Single-Member LLC)

Accepted Answer

Definition:A Single-Member LLC (SMLLC) is a Limited Liability Company with only one legal owner, known as the “member.” It offers the same liability protection as a multi-member LLC but with a simpler ownership and management structure.

By defaul...

Question 26

SSN (Social Security Number)

Accepted Answer

Definition:A Social Security Number (SSN) is a 9-digit identification number issued by the U.S. Social Security Administration (SSA) to U.S. citizens and eligible residents. It is primarily used for tracking earnings, tax reporting, and accessing go...

Question 27

Sales Tax

Accepted Answer

Sales Tax is a state-level tax imposed on the sale of goods and certain services within the United States. It is collected by sellers at the point of sale and remitted to the state government. Unlike VAT systems used internationally, U.S. sales tax ...

Question 28

Schedule K-1 (Partner’s Share of Income, Deductions, Credits, etc.)

Accepted Answer

Definition:Schedule K-1 (Form 1065) is a supplemental IRS tax form used to report each partner’s or member’s share of income, deductions, credits, and other financial details from a partnership or Multi-Member LLC (MMLLC) that has filed Form 1065.

...

Question 29

Stripe

Accepted Answer

Stripe is a powerful and developer-friendly payment processing platform that enables businesses of all sizes to accept online payments securely. With support for credit cards, ACH transfers, Apple Pay, Google Pay, and more, Stripe offers seamless in...

Question 30

Wise

Accepted Answer

Wise is a global financial platform that allows businesses and individuals to hold and send money in multiple currencies with low fees and real exchange rates. Non-U.S. founders can receive USD payments with local bank details without needing a U.S....