CorpNet Knows How To File

The growth of CorpNet Inc. is based on one crucial factor: the manner in which founders Nellie and Phil Akalp set up the business.

At the Westlake Village-based legal document filing service, the married couple has established partnerships in all 50 states with tax and legal professionals, CPAs and with other companies, including Intuit Inc. in Mountain View, Gusto Inc. in San Francisco and Patriot Software LLC in Canton, Ohio.

Phil Akalp says it was critical to set a priority, to take action on it, to measure whether it is succeeding, and then quickly pivot based on the information and data that they get.

“We try to set up an objective, we empower (the team) with that objective, we measure the performance on that and we give feedback on how to do better the next round,” he says. “What we find is that internally it exponentially grows in unexpected ways and in unexpected directions.”

This year, CorpNet landed at the No. 56 spot out of 170 companies on the Inc. Regionals Pacific fastest-growing private companies list with 259% in revenue growth over a two-year period. By comparison, it was in the 75th position last year and at No. 213 in 2021. 

“Our growth is mainly due to our payroll tax registration and business formation (services),” says Nellie Akalp. 

Offering both of those services came as a result of the pandemic, she adds.

“We decided to go full force in launching the product and automating the product and offering it in all 50 states as a product to our partners,” she says.

Companies use payroll tax registration to set up tax accounts need to pay employees. State income tax withholding accounts must be established, as well as state unemployment insurance accounts, Nellie Akalp says. 

This became crucial during the pandemic, when companies began hiring remote employees who lived in different states. 

Entrepreneurs and small-business owners often have no idea how to go about setting up these accounts, she continues. 

“Our mission has always been to educate and assist entrepreneurs and CPAs and tax professionals to make the business filing-process seamless,” she says.

Not their first rodeo

CorpNet isn’t the couple’s first business. In 1997, after having both graduated from California State University, Northridge and from law school, they started MyCorporation Inc., another business-filing company. 

In 2005, they sold the company to Intuit for $20 million in cash. (Intuit would sell back the company to an employee of MyCorporation in 2009.)

Phil Akalp then went off to study for the bar exam, and that is when Nellie Akalp sprang into action, he says, adding, “When she took over she added LLCs, she added trademarks, she added rush fees, she added upsells. She added all these variety of products.”

When he came back from studying for the bar, he hardly recognized the business anymore.

“I walked into the two-bedroom apartment and there were two people there from Pepperdine Law School, working at a desk because she had hired them,” he recalls. “I couldn’t believe how much she was growing this thing from stuffing envelopes on the floor into what she had built.” 

“He is great being the visionary,” Nellie Akalp says of her husband. “He is great in bringing it all together. Whereas I am really good at the executing on that.”

A thriving business model

The couple started CorpNet in 2009, investing just $10,000 to get it off the ground, plus an additional $3,000 to buy the online domain name CorpNet.com.

The CorpNet business model is based on charging fees for filings, 

“We are a pay-as-you-go service and we charge a fee for any business filling or payroll tax registration or an annual compliance service that an entrepreneur or a professional representing a client wants to order through us,” Nellie Akalp says. 

There are annual subscription services as well, says Phil Akalp, such as registered agent services, annual corporate compliance and maintenance services, annual report services and meeting-minute services.

Additionally, the company will partner with large payroll companies using its (application programming interface) to help them provide payroll tax registration services to clients. 

“We act as their backend fulfillment service,” Nellie Akalp says.  

There is another aspect to CorpNet’s growth – the company’s employees.

“Everyone who works here we give them a chance to grow,” Nellie Akalp says. “We believe in paying it forward.”

The couple shows their appreciation to employees by making sure they know they matter, she continued.

“That their words count, that their ideas count. And a result is evidenced by our growth,” she adds. “I cannot take responsibility for our growth just because it is me and Phil … ”

“They did it, they grew it,” Phil Akalp says. “We just try to provide a structured environment where they could do so freely and safely.” 

Milton Turcios, the director of operations, is the number three person after the Akalps at CorpNet.

He started more than a dozen years ago as a temporary receptionist and was hired on full time before his first week was over. 

Little by little he caught the business bug, Turcios says. 

“I felt their energy as entrepreneurs and how much ingrained into the business world they were and I was like, that was something to strive for,” he says of his bosses.

“I have done every job imaginable here for the last 12 years,” Turcios adds. “They saw me through my undergrad and through my MBA and now I am their right hand.” —  MARK R. MADLER