INCORPORATION

When you start a small business, you need to decide how to structure it. Each entity has its own set of pros and cons; which entity you choose will depend on your business, location and specific needs. Below is a list of the steps and the services we provide.

Step 1: Choose your Entity

SOLE PROPRIETORSHIP PARTNERSHIP C CORPORATION S CORPORATION LIMITED LIABILITY COMPANY (LLC)
LIABILITY
Unlimited personal liabiltiy Unlimited for general partners Limited for limited partners Shareholders generally not personally liable beyond their investment Shareholders generally not personally liable beyond their investment Members generally not personally liable beyond their investment
FORMATION
None / DBA File Certificate of Limited partnership with State File Article of Incorporation with State File Article of Incorporation with State + File "S" Election File Article of Organization with State
ACQUISITION
Limited to what proprietor can secure Easier than sole proprietorship since shared by partners Acquired by issuing stock or bonds Acquired by issuing stock Subject to operating agreement
TRANSFER
Difficult Difficult unless unanimous consent Readily accomplished through stock transfer Readily accomplished through stock transfer, but can't transfer to foreign or entity shareholders Absent agreement otherwise, need unanimous consent
TAX FILING
Schedule C with Form 1040 Form 1065, Distributes K-1s to partners Form 1120 Form 1120S, Distributes K-1s to shareholders Single Member: Schedule C with form 1040 - Multiple member: Form 1065, Distributes K-1s to member
TAXATION
Directly to owner Pass through to partnership Taxed at corporate level and taxed again to shareholders when dividends are distributed Pass through to shareholder Pass through to members
SE TAX
Subject to self-employment tax Subject to self-employment tax Only Salary subject to self-employment tax Only Salary subject to self-employment tax, shareholder distribution are not Subject to self-employment tax
PROS
Independence, flexibility, minimum red tape Chance of business success enhanced if right combination of partners Limited liability, any number of shareholders Limited liability, no double taxation Combines limited liability of a corporation with the pass through taxation of a small proprietorship
CONS
No legal separation between owner and the business Tax liabilities passed to individual government regulation and red tape, double taxation Not every corporation qualifies for S Corp. Filing and other fees may be higher than for a corporation
sample corporate kits

Step 2: Search available business name and reserve name

Step 3: Register with State (1-2 Weeks)

Step 4: Apply for company EIN number with IRS

Step 5: File statement of information

Step 6: Complete the Corporate Kit

Information needed to Incorporate:

  • Provide 2-3 desired business name
  • Shareholder name, address, and SSN (if foreginer as shareholder, copy of passport)
  • Name of President, CFO, Secretary, and Directors
  • Type of business
  • Products or services provided
  • Company address
  • Each shareholder's percentage

Services we provide:

  • Register with State
  • Apply EIN with IRS
  • Filing Statement of Information
  • By law
  • Minutes
  • Stock Certificate
  • Seal
  • Services Agent
  • Virtual Office
  • Open Bank Account
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