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What are the Main Differences between an LLC and an S-Corp?

What Is a C-Corporation?

What Is an LLC?

What Is an S-Corp?

Which Type of Company Incorporation is Right for You?

 

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Which Type of Company Incorporation is Right for You?

Maybe when you first started out, a partnership or sole proprietorship was ideal. Your business was small, your exposure to legal liability may have been low because most of your clients or customers came to you via referrals from friends and family. But an organization's growth can mean both opportunity --- and potential headaches.

Your firm having survived its infancy, it might now be time to branch out to doing business in other states. You might have more employees and wish to offer them benefits while taking advantage of a tax deduction. Offering benefits might even result in attracting better quality employees. You might even want to raise capital by means other than personal assets or business loans. For these and other reasons, incorporating your business can be a good choice.

Once you've decided that you want to incorporate, you still have at least one more question to answer: "Which type of company incorporation is right for you?"

As an owner, you have two types of corporate structure to choose from. The C-corporation is what most folks think of when they think of incorporating. A C-corporation must accomplish a list of administrative steps to establish and maintain its status, among them the filing of a number of IRS tax documents throughout the calendar year. An S-corporation must take the same set of administrative steps but does not have to file a corporate tax return. Instead, S-corp owners report any profits or losses on their personal tax returns.

With both C-corp and S-corp structures, you establish your company as a tax and legal entity separate from you and any other owners. Creating this entity acts to protect you from liability in the event that you are sued or your company goes into debt.

Whether you select S-corp or C-corp status, incorporating your business requires the completion of a good deal of documentation that must be filed according to somewhat strict procedures. To make things even more complicated, each state sets its own rules relative to incorporation procedures. Hiring a lawyer who is familiar with your state's rules, as well as with federal statutes and provisions, is advisable. Consulting with a business tax professional before starting the process is also a good idea.

To begin the incorporation process, you must file articles of incorporation with your state's Secretary of State. In addition, you have to craft and record a set of company by-laws. By-laws do not need to be filed with any official body, but must be kept with company files. Next, you have to schedule -- at least once per year -- shareholder and board of directors meetings. When meetings are held, minutes must be recorded and kept on file. Establishing a business name with state and/or local authorities, complying with licensing regulations and obtaining a federal tax ID number are also part of the process.

If you choose the S-Corp route, you need to be sure your company meets IRS requirements for "Subchapter S" status. These requirements are routinely updated, so checking in with a tax professional is encouraged. If you do indeed qualify, you must have your shareholders vote to approve S-corp status. Once you have established S-corp status, you'll be able to sidestep the liability concerns of a sole proprietorship or partnership, as well as the cumbersome tax filing requirements of a C-corporation.

Each incorporation choice boasts its own positives and negatives. When it comes to choosing between the two, your business objectives -- tempered with sound legal and tax advice -- should inform the process.

Yearlong incorporation study kicks off in The Woodlands

The Woodlands Township leaders may decide by early next year whether to recommend that voters consider turning the community into a city, according to township board Chairman Gordy Bunch. Bunch wrote in an email that the two consulting groups are helping ...

Published:  Mon, 14 May 2018 05:51:00 GMT



Camp uses West Virginia's coal as creative tool

The creations fall under the umbrella of McArts Fine Arts Incorporation founded by Jean Battlo and three other artists in 1979. "I wanted to do something for McDowell, so I started McArts," she said. And now she serves as Artistic Director while working to ...

Published:  Sun, 20 May 2018 06:00:00 GMT



Baton Rouge Area Chamber voices opposition to St. George incorporation

The Baton Rouge Area Chamber board has voted to formally oppose the incorporation of the proposed city of St. George. BRAC and East Baton Rouge Parish Mayor-President Sharon Weston Broome had previously gone over St. George's budgets but expressed doubts ...

Published:  Tue, 15 May 2018 08:37:00 GMT



A Claim of priority Cannot Be Made With an Incorporation by Reference

For any patent family that has two or more patents applications, the claim of priority needs to be made correctly. Otherwise, intervening references may become prior art when they could be avoided. The "115 Patent was the last patent in a family ...

Published:  Fri, 11 May 2018 02:26:00 GMT



New charity receiving Poland Spring aid lacks federal nonprofit status

The activities council successfully filed articles of incorporation as a nonprofit organization with the Maine secretary of state's office on Jan. 18, according to an office spokeswoman, but it has not applied for nonprofit status with the Internal ...

Published:  Sun, 20 May 2018 10:58:00 GMT



Prospect Co., Ltd - Notice: Share Trading Unit Change and Partial Amendment to the Articles of Incorporation

Prospect Co., Ltd. (the "Company") `s Board of Directors has approved the share trading unit change and partial amendment to the Articles of Incorporation. Note 1. About share trading unit change A. Reason: To comply with "Action Plan for ...

Published:  Tue, 15 May 2018 04:59:00 GMT



Town board OKs incorporation services deal

TOWN OF BELOIT - Town of Beloit Board members gave their blessing to a intergovernmental services agreement between the proposed Village of Riverside and the remaining Town of Beloit. Officials say both entities would share police, fire and public works ...

Published:  Tue, 08 May 2018 07:41:00 GMT



Matoaka residents vote to end incorporation

MATOAKA - About two dozen voters decided Tuesday that a Mercer County town chartered more than 100 years ago would no longer continue to exist as an incorporated municipality. The town of Matoaka's streets were quiet Tuesday while the polls were open.

Published:  Tue, 08 May 2018 20:05:00 GMT



Global Nerve Repair & Regeneration Market Growth Opportunities: Stryker Corporation, Boston Scientific Incorporation

May 16, 2018 (marketresearch.biz via COMTEX) -- The research study "Global Nerve Repair & Regeneration Industry" provides strategic appraisal of the Nerve Repair & Regeneration market. Our expedition specialists acutely determine the momentous aspects ...

Published:  Wed, 16 May 2018 02:55:00 GMT



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