Help with Structure-Being Incorporated
Structure: Corporation (S, C, LLC, LLP)
You have selected and secured your Business Name and have determined that filing your business structure as an Assumed Name or DBA may not be the best choice for the type of business you have. You’ve calculated your liability and risk, and have even determined that even with the best amount of insurance, you want to protect yourself, your family, your assets and your future more appropriately. Globally speaking, you believe that customers in other counties, states or countries can and will benefit from the product and/or services you offer; therefore, you refuse to limit your possibilities, growth and future potential for your business.
There are several types of corporation filings that may be appropriate for your business. Please check with your competent business consultant, certified public accountant, tax preparer or attorney to see which corporation filing structure is appropriate for you.
Different from an Assumed Name or DBA filing, you have the ability of doing business in every city, county and state—all 50 states. The “sky’s the limit” as to where you can do business.
The business structure as a corporation can be singular or have partners, officers, board of directors, managers, members, secretary, and/or treasure. If you’re the only person in your business, then you will wear many “hats”.
Corporation filings may include:
· Other companies or entities.
When considering a corporation filing, you become an employee of your company. You will typically pay yourself a salary (when profitable and able to do so) as well as any employees you may have. Your corporation filing acts as an umbrella or shield against your personal assets and may protect you (personally) in the event of an occurrence such as a lawsuit, assault or accusation that could be harmful to you, your family and your real property.
Another consideration for becoming a corporation, this business structure is filed with the secretary of state. In most states, you will need to abide by the state’s business code (law) when conducting business. You are also required to have
· Articles of Incorporation (business codes and laws for your state pertaining to your business
· Business Bylaws (regulations you have determined as important operation guidelines)
· Minutes (corporation business meeting that is documented)
· Person or Agency of Service (if you are served or need to receive important documents, who can receive them on behalf of your company or business)
· Owners are called Managers, Members, Officers, Board of Directors (see particular structure)
Structure: Corporation (S, C, LLC, LLP)
There are several types of corporation structures that you can file for your business. In the interest of time and reading, we will discuss four (4). You must consider the type of business you have, its liability and risk, tax bracket you place the business in, whether or not you will have partners, and whether a licensed is required for what you specialize in. Please check with your local state’s secretary of state website or office for clarification or more information.
Sole Proprietor or “S” Corporation
This type of corporation is almost self-explanatory. It means that there will be no one else within this business structure but you. You own 100% of the business or company’s assets. Under this corporation structure you are not allowed to have any employees other than yourself. Again, check with your competent business consultant, certified public accountant, or tax preparer for the best tax benefit.
In the event that your business grows or an opportunity presents itself where you may need to have a partner or obtain employees, you may be able to file a “Status Change” with your state’s secretary of state office. When doing this, there are additional fees involved. Should you ever make a change to your corporation structure, you must always notify the Internal Revenue Service (IRS) as well.
Corporation or “C” Corporation
This type of filing is typically filed if you plan to hire employees or hire employees within the next 18 months of your filing. Within this corporation, you may have partners, officers, and/or board of directors. Again, check with your competent business consultant, certified public accountant, or tax preparer for the best tax benefit.
Limited Liability Corporation (LLC)
A Limited Liability Company (LLC) is a business structure allowed by state statute. Each state may use different regulations, and you should check with your state if you are interested in starting a Limited Liability Company.
Owners of an LLC are called members. Most states do not restrict ownership, and so members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit “single-member” LLCs, those having only one owner.
When filing this type of corporation structure, you must include the words “limited liability corporation” or “LLC” as part of your name. For example: “Sock Maker USA, LLC”.
Limited Liability Partnership (LLP)
Professional organizations (such as accounting and law firms) often form as limited liability partnerships because an LLP is specifically-designed to limit malpractice claims against uninvolved partners. Each partner is liable for debts and obligations created as a result of his or her own negligence, malpractice or misconduct, as well as negligence, malpractice or misconduct by any person under that partner's direct supervision.
A limited liability partnership, or LLP, is a relatively new creation. It operates much like a limited partnership, but gives each member of the LLP protection from personal liability, except to the extent of their investment in the LLP.
Generally, partners in a limited liability partnership aren't responsible for another partner's debts, obligations, or liabilities resulting from negligence, malpractice or misconduct.
If you are considering filing a limited liability partnership, in most instances, a license is required for your services.