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Freelance Writer and Small Business Expert Smallbizstew.blogspot.com eBook Web: http://www.smallbizstew.blogspot.com Email: email@example.com There is a lot to know about the different types of entities and figuring out which entity is best for your business is extremely important. There is so much information to be told about each entity that SmallBiz Stew created a free eBook series to help you pin point which entity is best for you and your business. In this eBook you will learn all about corporations from S&C corporations to a non profit organization. You will also learn in this eBook, simple methods on how to pick the right business entity for your business. This is a good resource for already established businesses that may need a refresher course about their business entity. Keep in mind When deciding on which entity is best for you keep the following in mind: Your Business goals Business structure How do you want your business structured? Business legal vulnerabilities Are you entering a high-risk business that may make your business vulnerable to lawsuits? Tax effects What are the tax implications and which entity offers the best tax benefits? License, Attribution http://creativecommons.org/licenses/by-nc-nd/3.0/on and investment Please feel free to post this eBook on your blog Start Up costlink to it with whomever you believe will benefit from reading i Ease of ending business Starting a business requires a lot of To start a corporation means to start a business that is decisions and some of those choices considered legally a special entity separate from its owners. can legally bind you to them. Being Corporations are seen as an entity that can be legally sued, completely informed on the decisions responsible for tax obligations and other obligations as a sole you have to make will help you make proprietor would. The biggest difference between corporations the right decision that best suits your and general partnerships (GP) is the business structure. GP's personal and business needs. Today’s are usual in charge of the day to day business activities and discussion will cover S & C corporations make all the necessary business decisions but corporations and non-profit. are run by elected board of directors who oversee the major operations for the shareholders (owners). Another difference between corporations and partnerships is the vitality of the business depends heavily on the longevity of the partnership wherefore corporations continue to move on even after ownership change. Trying to figure out if a corporation is the best entity for you and your business, use the below advantages and disadvantages to help you decide. http://www.flickr.com/photos/23065375@N05/2247354856/z Stew! Copyright @ 2010 SmallBizStew.blogspot.com. All Rights Reserved. Photo by: Thinkpanama- The advantages of the business entity Disadvantages of the business entity corporation corporation Long and costly set up Limited Liability- Risk usually is limited Heavily regulated to the shareholders investment in the Depending on what type of corporation can be business (there are exceptions see double taxed www.irs.gov for more). Possible higher taxes No longer complete control over business If the corporation is a stock-corporation Shared profits then capital can be raised through selling of company stock Tax deductions for employee benefits Depending on the type of corporation may be able to do pass thorough taxes. Assistance with startup cost This eBook courtesy of Dawn Austin, writer of SmallBiz Stew! Copyright @ 2010 SmallBizStew.blogspot.com. All Rights Reserved. Photo by: Thinkpanama- Business Name Check You have to make sure that the Paperwork business name that you have isn't Stock already being used by another You will need to complete the necessary The issuing of stock to shareholders detailing paperwork usually titled Articles of their ownership shares in the corporation. corporation and that your Incorporation with your secretary of corporation name is in compliance state and pay the requested filing fee. The with your state corporation rules. filing fee also varies by state and ranges Starting a corporation can be very time consuming and strenuous on your pockets. Appointment of Directors from $55 to $400. Check with your Knowing which corporation you want to start secretary of state website to get the state can take some of the headache out of the The Board of Directors is the specific requirements and the necessary decision makers who possess the paperwork. battle. creative control to guide the business during financial decisions There are different types of corporations that including the disbursement of stock www.sos.state. (enter your state abbr.).us you can start. Two of the most popular are S corporation and C Corporation. S and C and the appointment of corporate First Meeting officers. Check with your state rules Have your first meeting with the board of corporations originate from the corporation to see if it is necessary to list the directors where you can discuss the govern subchapters of the Internal Revenue initial directors in your filing. Some Code. Both types are corporations but with corporations use their first meeting necessary things to begin your corporation. different governing rules and tax implications. This may be the time that many Each is seen as separate identities from its to decide on directors. corporations chose to pick the board of directors and corporate officers. owner and both offer limited liability protection to its owner. Outside the tax implications both corporations are governed by the same rules, so now let’s look at what makes them different. This eBook courtesy of Dawn Austin, writer of SmallBiz Stew! Copyright @ 2010 SmallBizStew.blogspot.com. All Rights Reserved. Photo by: Thinkpanama- S corporations are corporations that elect to pass Qualifications for S corporation status corporate income, losses, deductions and credit through to their shareholders for federal tax Be a domestic corporation purposes. (IRS, April 2010) Have only allowable shareholders The great thing about S corp. is the fact they are allowed the special tax privilege pass-through Including individuals, certain trust, treatment. and estates and may not include partnerships, corporations or non- Pass-through tax treatment allow for business resident alien shareholders owners to report their gains/losses on their personal income tax which eliminates the Have no more than 100 shareholders possibility of double taxation. Have one class of stock Not be an ineligible corporation i.e. certain financial institutions, insurance companies, and domestic international sales corporations. This eBook courtesy of Dawn Austin, writer of SmallBiz Stew! Copyright @ 2010 SmallBizStew.blogspot.com. All Rights Reserved. Photo by: Thinkpanama- All publicly owned businesses are C The major differences between S&C corporations corporations because unlike S corp.'s., C corp.'s can have unlimited owners. As a C Most C corp.'s are publicly owned business and that’s corporation you also benefit from the the biggest difference between S and C corporations. dividends received deduction (DRD) S corporations are not allowed to have more than 100 owners but a C corporation can have unlimited which make dividend payments tax number of owners. deductible. Which protects C corporations from being triple taxed; Corporation taxed, corporate shareholder then individual Corporations, partnerships, LLC's can become a C shareholder taxed but DRD protects the C corp. because C corp. is not limited to possible owners (shareholders). Corporation from triple taxation. Shareholders and C corporations are taxed subjecting C corporations to double taxation, but S corporation are given pass through tax treatment. This eBook courtesy of Dawn Austin, writer of SmallBiz Stew! Copyright @ 2010 SmallBizStew.blogspot.com. All Rights Reserved. Photo by: zzzack- Another popular type of corporation is nonprofit organization. As a nonprofit you are in the business of providing a service or program for the sole purpose of development rather than for self or community. S and C corporations are for-profit organizations that sole purpose is to profit and redistribute those profits amongst the stakeholders in the business.A nonprofit may accrue earnings but it is for the sole purpose of self preservation and financial backing for future business plans. The stake holders does not financially profit from the success of the nonprofit. These are formed for civic, educational, charitable, and religious purposes and enjoy tax-exempt status and limited personal liability. (SBA) The major advantage of non profit is the ability to file for tax- exemption from income tax and for some charitable organizations, property taxes. It does not make them exempt from employment taxes. Other advantages are the limited liability and starting a nonprofit may qualify you for grants and other financial assistance. http://www.flickr.com/photos/shellysblogger/2464975775/in/photostream/ @ 2010 SmallBizStew.blogspot.com. All Rights Reserved. Photo by: Shelly- Starting a corporation can be a tedious task and making Deciding on the right entity can be at times tough sure that your business structure is set up correctly and and maybe speaking with a professional who has meet the many legal requirements can be experience in business and tax law can you help overwhelming. Seeking the assistance of an attorney you decide on the right business entity for you. will not only help you make an inform decision but will also make sure that you are in compliance with the Make sure to visit your secretary of state website for state and federal government. state specific requirements for starting a business in your state. This is the end of the three part discussion on different business structures. When trying to figure out which www.sos.state. (enter your state abbr.).us entity is best for you and your business, keep the following in mind: This eBook teaches what a corporation is and the different business structures under corporation. Your Business goals Business structure-How do you want your business This eBook is free public service of structured? SmallBizStew.blogspot.com. Please share this Business legal vulnerabilities- Are you entering a eBook with anyone. To learn more helpful high-risk business that may make your business information, tips and methods to start a small vulnerable to lawsuits? business visit Tax effects- What are the tax implications and which http://www.smallbizstew.blogspot.com. entity offers the best tax benefits. Profit/Loss projection and investment Start Up cost Ease of ending business Copyright holder is licensing this eBook under the Creative Commons License, Attribution http://creativecommons.org/licenses/by-nc-nd/3.0/. Please feel free to post this eBook on your blog, email it, or link to it with whomever you believe will benefit from reading it. Photo by: Shelly- http://www.flickr.com/photos/shellysblogger/2464975775/in/photostream/ About Dawn: A professional independent writer who uses innovative and creative ways to fulfill companies freelance writing needs. Dawn’s valuable knowledge and Specializing in small business start up and literature with experience on the intricate parts of over 10 years of experience in small business. starting a small business arms potential entrepreneurs with all the In 2010, she launched a small business blog titled necessary tools needed to start a small business without some of the http://www.SmallBizStew.blogspot.com, where she is able to hassle that most new entrepreneurs share her 10 years of experience and knowledge to potential experience. entrepreneurs who desire an in-depth understanding of how to start a new business. Her experiences afford her the opportunity to not only share proven methods but also tips and lessons that small business owners can use to help the Dawn Austin is available for small vitality of their business. business start-up consulting and freelance writing service at: Her knowledge and blog discussions cover a broad range of small business information like: legal, administration, Web: http://www.dawnaustin.com suppliers and book keeping. The information that she Email: firstname.lastname@example.org provides to small business owners are geared toward helping Check out my small business blog for them: minimize mistakes and risks, make informed decisions, assistance on small business start-up. simplify legal jargon, stay in compliance and most important help them get started. http://www.smallbizstew.blogspot.com. DawnAustin
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