Formation mistakes
- Forming in the wrong state — usually New Mexico for a business that then can't get banked
- Naming the entity too close to an existing trademark
- Skipping the Operating Agreement
- Using a residential home address as business address
Tax mistakes
- Missing Form 5472 — automatic $25,000 penalty per year
- Filing state annual reports late
- Not electing S-Corp when income exceeds ~$60k (US residents)
Banking and payment mistakes
- Applying to Stripe with a half-built website
- Using inconsistent addresses across bank, entity and website
- Opening multiple bank applications on the same day
Compliance mistakes
- Missing BOI filing at FinCEN
- Not filing BOI changes within 30 days of an address or ID update
- Ignoring registered-agent mail
Frequently asked questions
Missing Form 5472. It is a flat $25,000 IRS penalty even if you owe no tax.