Start A Company
Types of Business Structures
An LLC can be formed by filing the “Articles of Organization” with the Secretary of State’s office and paying a filing fee.
Owners of an LLC are called “members.” Most states do not restrict ownership and can include any of the following; Other LLC’s, corporations, individuals, and foreign entities only requiring at least one member and no maximum.
An LLC can be treated as a corporation, partnership, or part of the Owner’s tax return.
The formation documents must be filed with the appropriate state agency and a filing fee is required. It is required that a registered agent stay in the state of formation.
An LP must have at least on General Partner with unlimited liability and at least one limited partner whose liability is limited to their investments in the company.
The limited partners make capital investments and generally have no control over the company.
All profits and losses flow directly to the limited partners, and the company itself is not taxed. Being passive income the losses can only offset other passive income.
Formed by getting a license or permit and registering with the local government.
Personal assets and business assets are one and the same for liability purposes. Your name is the businesses legal name. The least restrictive, most private form of organization.
Must file a 1040, a schedule C, a schedule SE and form ES. A W-2 wage and tax statement, Medicare, Social Security and income tax withholding on Form 941.
Register with the county clerk’s office in the county where the business is located. You may have to register with the Secretary of State or another required agency as well as the local level and pay the necessary filing fees. You must also obtain any required licenses.
Generally each partner is equally responsible for all of the partnerships debts.
Each partner pays taxes based on their own share of business income, the partnership itself does not pay tax.
File the Articles of Incorporation with the Secretary of State and pay the required filing fee.
Generally requires at least two parties, not required that they are shareholders. Owner’s are typically required to be licensed in the same profession.
Only business entity that is taxed on its own profits. Taxable profits are the retained earnings and profits that are distributed as dividends. Must file the IRS Form 1120 and pay taxes at a corporate tax rate, if it is assumed the company will owe taxes, it is required it estimate the amount and pay the IRS on a quarterly basis. Salaries and bonuses are deductible to the business. If the owners also work for the company they are required to file their individual taxes like a regular employee.
File the Articles of Incorporation with the Secretary of State. Apply with the IRS to obtain and Employer Identification Number and any other ID numbers required.
Must have only allowable shareholders as in individuals, estates, and some trusts. Can not be a partnership, corporation, or alien shareholder. Can only have one class of stock and no more than 100 shareholders. Each owner that also works as an employee must receive what would be considered a reasonable salary.
The corporation itself is not taxed, instead it is considered a pass-through entity and it’s shareholders are taxed on their share of the income. S-Corporation shareholders do not have to pay self-employment taxes on their shares, which can be beneficial if the corporation is earning enough. The owners salaries are still subject to Medicare and Social Security, which both the employee and the corporation pay half.
File the Articles of Incorporation with the state. A nonprofit can choose to either be incorporated or unincorporated. To form an incorporated nonprofit you must file the paperwork with the state and pay a fee, usually with the Secretary of State.
Nonprofit’s must create bylaws, which govern how they will operate. They help to regulate how they can elect directors and officers and how many they should have.
Some qualified nonprofits can be Tax Exempt from federal taxes, these qualifications can be found in Section 501 of the IRS tax code. They are also exempt from paying sales and property taxes. Even if the nonprofit is exempt for the sales and property taxes, they must still pay employee taxes.