By Madame Margherite
When deciding to form a business the first thing I like to do is look at all the types of businesses possible, and pick a formation that fits best for me based on what I want to do.
The types of businesses or corporations are:
Limited Liability Company
Limited Liability Partnership
Non Profit Organizations
I now know to go straight to USA.gov and then navigate through the site until I have my answers.
Filing for an LLC
1- How do I file for an LLC? This is the result: https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc
You need:A unique name
Articles of Organization: http://bpd.cdn.sos.ca.gov/llc/forms/llc-1.pdf
Announce in your local paper that you have formed your LLC
Get an EIN (Employee Identification Number) so that you can hire employees and pay taxes.
A C Corporation has share holders and exchange money and assets.
They are subject to taxes regardless of whether or not they profit
They pay taxes and then split profit evenly among share holders
Each share holder has to pay taxes individually and as the corporation as a whole this is called double taxation
C Corps can operate internationally.C Corps reduce individual taxes by paying most of their expenses out of corporate funds and pay themselves a very low salary.
C Corps are the types of businesses that qualify for bailouts because of the taxes they pay and because they can very easily become a business umbrella due to all the people with stakes in the corporation.
Big successful S Corps can sell stock backed by their company which makes it easier to raise capital and profitable to sell if desired. However it’s the most complex and costly corporation to form. The tax forms are complex and have many legal requirements.
Best for people who intend to expand or become chains.
Also the type of Corporation that may qualify for bailouts.
Limited Partnerships: https://www.sba.gov/starting-business/choose-your-business-structure/partnership
Limited Partnerships are corporations that split responsibility between all the owners. They must be partnerships and cannot be owned by one person. This is useful when looking for a silent partner. One of you will be solely responsible for all the initial capital to form and run the business and one will be solely responsible for day to day operations. Neither partner will have incur responsibility for the other’s position. Partners of an LP spilt profits as described in the partnership agreement.
First you register your company based on your Partnership agreement, a customized contract between partners.
Then you choose a name. If you don’t agree on one in your partnership agreement then you will be assigned a name based on the last names of the partners.
Then finally you get permits that you might need.
Another benefit to an LP is that Partners can sell off fractions of their shares.
For questions either comment here or email me at ItsMarg@Hotmail.com