Source : https://infotaxsquare.com/new_business_setup.htmIntroduction
DOING BUSINESS UNDER A LEGAL ENTITY OR THEIR GIVEN NAME
Today’s program is about the distinction between different entities to do business.
There are many types of corporate structures in the United States and some of them are :
1. Regular C-Corporation
2. Sub-Chapter S-Corporation and
3. A, Limited Liability Company
And today We wish to ask our guest about the difference between a Regular C-Corporation, Sub-Chapter S-Corporation and a Limited Liability Company.
This is your host Monazza Aarfa at DueClixVoiceFM . In our programs, we invite different distinguished personalities who have a successful record and outstanding achievements in specialized areas. We usually invite individuals who have introduced or discovered something new rather than follow a tradition. They do not just lean on it, but lay on it.
I would like to take a moment to remind you to support DueClixVoiceFM in any way you can, to roll your information across the globe through the internet waves. Do not just sway with it, but also kindly support it.
Our guest today is Rasheem James Northington who is the spokesperson of InfoTaxSquare , one of the leading companies of the United States that has established thousands of companies across the nation since 2003.
Frequently Asked Questions
Why start a C-Corporation to initiate a new business? +
I am going to highlight a few features of a C-Corporation that may be helpful for your listeners to decide if a C-corporation is right for them to start a business. Creating a new corporation varies on a unique situation and today, I will share with you a general perception rather than my opinion and I recommend that you and your listeners consult with an attorney or a CPA before initiating to form a new entity to start a business.
1. To attract investors - You can Raise funds by appealing to investors who may prefer corporations for their ability to offer stock.
What are the main differentiators of a Regular C-Corporation? +
C-corporation has three main differentiators:
One: Formation — C Corporations have considered the default type of corporations. When you file articles of incorporation in your state, you’re designated a C Corp. If you want to be an S Corporation, you’ll need to file Form 2553. There might be other forms to complete as well to stay as an S-Corp. Such as some states want additional paperwork to recognize it as an S-Corporation.
Who should form an S-Corporation? +
There are a number of reasons that appeal to a business owner to do business under an S-Corporation rather than a regular C-Corporation or a limited liability company. An, S-Corporation has a few very unique features such as;
1. An S-Corporation is Taxed Once.
Who form a limited liability company which apparently seems very popular? +
If neither a C Corp or S Corp works for you, there are other ways you can set up your business. For instance, you can set up your business as a partnership, trust/estate, sole proprietor or LLC. If you’re planning on being the only person in your company, you might benefit from setting up your company as a sole proprietor or LLC. But keep in mind that as a sole proprietor, there’s virtually no distinction between you and your company. If your company accrues debt, you’re personally responsible for paying it off. And if you don’t, your assets could be seized to pay for that debt.
However, An LLC also has some unique features that I intend to highlight a few of them:
Concluding with a quick recap about the difference between a corporation and an LLC that I have mentioned earlier in this program:
1. Both corporations and limited liability companies protect owners so they're not personally on the hook for business liabilities or debts.
2. An LLC can be treated as a corporation or an S-Corporation, whereas a corporation or an S-Corporation cannot be treated as an LLC.
3. LLCs may have one or more owners whereas corporations have one or more shareholders.
4. Both corporation and limited liability company generally have more formal record-keeping and reporting requirements.
5. Even though LLCs are considered easier to start and maintain, but the investors tend to prefer corporations.
6. Finally, every business requires a business license also along with business name registration to conduct business.