At the Law Office of Raphael Darrington, our attorneys will assist businesses with selecting the proper business structure and unfortunate accidents of the business. This type of liability is easily avoided with a consultation from a licensed attorney. Here are a few basic business structures that may be a fit for your business that our attorneys could assist you in forming:
Sole Proprietorship
A sole proprietorship is an unincorporated entity that is owned by one person. The owner pays personal taxes on revenues derived by the entity. A sole proprietorship is the simplest form of business organization. With very limited government regulation, they are the easiest to set up because they essentially only require an individual to engage in their trade. Sole proprietorships report income and business obligations.
Limited Liability Company
A Limited Liability Company is a hybrid, private business entity that affords a business person the tax privileges of pass through income like a partnership or sole proprietorship, but affords its members protection from personal liability of business decisions. The business entity itself is not taxed and regulations that should be followed for the organization.
The IRS provides the following requirements for Tax Preparation of LLC’s/LLP’s:
- A single member LLC and file Form1040/Schedule C
- Partners in an LLC should file Form 1065
- Corporations in an LLC should file form 1120
S Corporation or S Corp
An S Corporation is a special type of corporation that is treated like a separate entity than its shareholders but it’s still afforded the pass through tax incentives like a sole proprietorship and allowing the remaining income to be received as a distribution which is typically taxed at a lower rate.
C Corporation or C Corp
A C Corporation is the traditional corporate structure of a business entity owned by shareholders. The Corporation itself is primarily responsible for the liabilities of the entity. Corporations are the most complex of any business structure and tax compliance costs that most businesses do not have.
