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: