How to properly collect money from corporate sponsors?
http://www.legalzoom.com/business-management/starting-your-business/turn-your-calling Answering this, but I expect an expert to give an answer with some insight too There are many more steps, but not having done them personally I suggest you read the legalzoom.com site. If this is something you plan to continue doing it would make sense to create it as it's own business entity and then to get non-profit status eg: 501c3.   Otherwise I'm pretty sure you have to think of it as YOU receiving the money as a sole proprietor - and file a couple more tax forms at the end of the year. I think it's a Schedule C.  So essentially if you bring in $10,000, then you spend that $10,000 as legit business expenses for your venture your schedule C would show no profit and wouldn't pay taxes on it. BUT, you do have to file that form. Operating this way could have legal implications should something happen and you get sued. Having the proper business entity setup could help in that situation.
Choosing an activity class for your child is easy now, as today there is lot of focus and importance given to Pre-School and Activity Centre, these Pre-School and Activity Centre are now in huge demand, these school and centres are now properly looked as profession with more and more people getting into it and putting up a proper management and SOP’s to run the schools and centre, there are few companies backed by corporates and run through proper management.  Parents are constantly looking at more than one way to enroll their kids in some activity class, so as to engage them into activities that can help them become better, healthier and active individuals. As parents now, not only wants the child to be properly educated, they also want the child to be developed with the best extracurricular activities. Activity Centres in Chembur play an important role in the development of the skills of the child, they help the child to horn their skills and showcase their talent. I heard that a C-Corp being a one person shop (no other employees but the owner) can pay for the full amount 100% of personal rent if the residence is being used as a home office. Sure. Especially if you don't mind being audited. Technically, it doesn't matter how the money gets where it goes as long as the income tax filings accurately describe the tax situation. But the IRS hates it when you make personal expenses from a business account, even if you've paid the required personal income tax (because their computers simply aren't smart enough to keep up with that level of chaos). Also, on a non-tax level, commingling of business and personal funds can reduce the effectiveness of your company's liability protection and you could more easily become personally liable if the company goes bankrupt. From what I understand the 30% would be the expense, and the 70% profit distribution. I recommend you just pay yourself and pay the rent from your personal account and claim the allowed deductions properly like everyone else. Why & when it would make sense to do this? Are there any tax benefits? Never, because, no. You would still have to pay personal income tax on your 70% share of the rent (the 30% you may be able to get deductions for but the rules are quite complicated and you should never just estimate). The only way to get money out of a corporation without paying personal income tax is by having a qualified dividend. That's quite complicated - your accounting has to be clear that the money being issued as a qualified dividend came from an economic profit, not from a paper profit resulting from the fact that you worked hard without paying yourself market value. Square is a company. They need to detail as part of their corporate taxes all of their expenses. The money they collected for you, and sent to you, is not income for themselves. Their tax form included the amount of money they sent you, along with either your Social Security Number of corporate tax id. The IRS computers match the information regarding expenses to the information regarding income. In this case the expense listed by Square didn't match-up with a line of your tax forms for that year. The IRS now sees that as unreported income. If you didn't tell them about other expenses you had, they can only assume your expenses were zero.  Congratulations you have a business. Unfortunately the Federal, state and local governments now will want to know about your business. You may have to fill out multiple years worth of tax forms and other required forms. Yes, you should getting professional accounting and tax help. The standard approach is to reach an agreement and put it in writing. What you agree upon is up to you, but in the US if you want to avoid gift taxes larger loans need to be properly documented and must charge at least a certain minimal interest rate. (Or at least you must declare and be taxed upon that minimal income even if you don't actually charge it. Last I looked, the federal requirement was somewhere under 0.3%, so this isn't usually an issue. There may also be state rules.) When doing business with friends, treat it as business first, friendship second. Otherwise you risk losing both money and friendship. Regarding what rate to charge: That is something you two have to negotiate, based on how much the borrower needs the money, how much lending the money puts the lender at risk, how generous each is feeling, etc. Sorry, but there is no one-size-fits-all answer here. What I charge (or insist on paying to) my brother might be different from what I charge my cousin, or a co-worker, or best friend, or... If both parties think it's fair, it's fair. If you can't reach an agreement, of course, the loan doesn't happen. Typically you give a loan to the company from yourself as a private person, and when the company makes money the company pays it back to you. Then the company pays for all the expenses with the money from the loan.  Even if you don't want a business account yet, you can probably ask your bank for a second account (mine in the UK did that without any problems). "You should have separate files for each of the two businesses.  The business that transfers money out should ""write check"" in its QB file.  The business that receives money should ""make deposit"" in its QB file. (In QB you ""write check"" even when you make the payment by some other means like ACH.)  Neither business should have the bank accounts of the other explicitly represented.   On each side, you will also need to classify the payment as having originated from / gone to some other account - To know what's correct there, we'd need to know why your transferring the money in the first place and how you otherwise have your books established.  I think that's probably beyond the scope of what's on-topic / feasible here. Money into your business from your personal account is probably owner's equity, unless you have something else going on.  For example, on the S Corp you should be paying yourself a salary.  If you overpay by accident, then you might write a check back to the company from your personal account to correct the mistake.  That's not equity - It's probably a ""negative expense"" in some other account that tracks the salary payments." You can receive funds from US Client as an individual. There is no legal requirement for you to have a company. If the transactions are large say more than 20 lacs in a year, its advisable to open a Private Ltd. Although its simple opening & Registering a company [A CA or a Laywer would get one at a nominal price of Rs 5000] you can do yourself. Whatever be the case, its advisable to have seperate accounts for this business / professional service transactions. Maintain proper records of the funds received. There are certain benefits you can claim, a CA can help you. Paying taxes in Advance is your responsibility and hence make sure you keep paying every quarter as advance tax. Related questions Indian citizen working from India as freelancer for U.S.-based company. How to report the income & pay tax in India? Freelancer in India working for Swiss Company Freelancing to UK company from India How do I account for money paid to colleagues out of my professional income? It's income. Create an income account for it, or use a broader “miscellaneous income” account, depending on how precise you want to be.