We provide small to mid-sized client advice on how to create the legal infrastructure for future business
operation.
Corporation
Forming a corporation is costly and complicated. The advantage of incorporating is that a corporation's owners are shielded from personal liability for the corporation's debts and liabilities. C Corporations are taxed separately from the owners. However, an S Corporation is a pass-through entity, meaning that the profits are passed through and taxable to the owners.
'Sole
Proprietorship
A form of business in which one person owns all of the assets of the business. The sole proprietor is solely liable for all the debts of the business. Setting up a sole proprietorship is cheap and simple, since no legal formation documents need to be filed with the Secretary of the Commonwealth.
Partnership
This is a business which is owned by two or more people, who are personally liable for all business debts. Partnerships are easy to form since no legal formation documents need to be filed with the Secretary of the Commonwealth. The Partnership is a pass through entity for tax purpose. The profits are passed through and taxable to the partners. Although it is not required, it is advisable to draft a partnership agreement between the partners to establish issues such as ownership percentage and division of profits or losses.
LLC
A limited liability company is a form of business, created under state law, which has characteristics of a corporation and a partnership, such as limited liability, management by member or managers, and limitations on the transferability of ownership interests. Like a partnership and sole proprietorship, an LLC has operating flexibility and is a pass through entity for tax purposes: This means that the profits of the LLC are passed through and taxable to the owners of the LLC
he information you
obtain at this site is not, nor is it intended
to be, legal advice. You should consult an
attorney for individual advice regarding your
own situation
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