S corporation? C corporation? Limited liability company ?
Many people are often confused and don’t know what to do. We will be going into the key differences so that you will be closer to making the right decision. You and your advisers will be able to consider your options and select the right entity for your business.what we will not be talking about is limited partnerships in this discussion.
The reason is not due to any prejudice what we will not be talking about is limited partnerships in this discussion. The reason is not due to any prejudices.
likes: no limit on a share holders and classes of stock. Lower tax rates on the first earnings allowing for future expansion. This is the best it’s a tea for going public where maximum fringe benefits are allowed and free transfer ability of stock.
Dislikes: double taxation on profits. Fixed allocation of profits and less flexible management structure.
likes: efficient tax treatment. The best entity for minimizing payroll taxes. There’s a charge in order protection for corporate shareholders with Nevada corporations, for both S and C corporations.
dislikes: must apply for flow through tax treatment. Limits on shareholders and classes of stock. No flow through business debt and fix it allocation of profits.
Limited liability companies.
Likes: excellent asset protection and the charging order rules in Nevada and Wyoming. There’s a flow-through of business debt. Flexible management structure and I’ll location of profits.
Dislikes: difficulty and minimizing payroll taxes. It’s a newer entity with less cases to interpret future events.
The two main reasons for forming an entity are: one: to operate a business to: to hold assets.