HOW WILL YOU STRUCTURE YOUR BUSINESS?

• Sole Proprietorship
• General Partnership
• Limited Partnership
• S Corporation
• C Corporation
• Limited Liability Company (LLC)

A Sole Proprietorship -
This is the simplest form of business in which a sole owner and his business are not legally distinct entities; the owner is personally liable for business debts.

A General Partnership -
this is a partnership in which there are no limited partners, and each partner has managerial power and untitled liability for partnership debts.

A Limited Partnership -
The limited partnership has limited and general partners. The general partners manage the business and are individually liable for the debts of the partnership. The limited partners are limited in the amount they can lose, by the amount of money they invested in the partnership.

A "S" Corporation -
A corporation that is eligible and elects to be taxed under Subchapter S of the Internal Revenue Code. Basically, shareholders pay tax on the corporation's income by reporting their pro rate shares of pass-through items on their own individual income tax returns.

A "C" Corporation -
A corporation is an organization authorized by state law to act as a legal entity distinct from its owners. A corporation has its own name and its own powers to achieve legal purposes and, therefore, is a separate legal entity.

A Limited Liability Company (LLC) -
The LLC is a hybrid between a corporation and a limited partnership. LLC's provide protection from personal liability, just as corporations do, and yet LLC's receive the tax treatment of limited partnerships or a C corporation, whichever the members of the LLC desire.

WHAT IS THE BEST STRUCTURE TO BUILD CREDIT?

The best structure for building business credit is one that will:

• Separate you from your business.
• Have its own tax identification number.
• Separate the debts of the business from that of the owners/officers.

The business structures that will do this are:

• S Corporation
• C Corporation
• Limited Liability Company (LLC)

This does not mean that building business credit cannot be accomplished with a sole proprietorship or partnership.

WHY INCORPORATE ANYWAY?

S corporations, C corporations and LLC’s offer the following benefits:

• Limited personal liability of officers and owners
• Protection of personal assets from the business
• Protection of corporate assets from the owners and officers
• A separate business credit profile
• Easier to raise capital
• Easier to solicit investors
• Lower tax liability
• Corporate image
• Lower risk of IRS audit

WHEN IS IT BEST TO INCORPORATE

The best time to incorporate is when:

• Your business has over $35,000 per year in sales.
• Your business is a high-liability business.
• You want to take advantage of the many tax benefits of a corporation.
• You want to take advantage of the many retirement plans for officers/owners.

When making a decision to incorporate, you should always have expert advice from a trusted advisor before moving forward.)

WHY SELECT A "S" CORPORATION STRUCTURE

• When the owners live in a state with no personal state income tax.
• When one or two individuals own the company. (Can be as many as 35)
• When sales are less than $250,000.

WHY SELECT A "C" CORPORATION STRUCTURE

• When the owners live outside the country.
• When the owners live in a state with a state income tax.
• When several individuals are involved in the ownership.
• When other entities are in involved in the ownership.
• When sales are greater than $60,000.

WHY SELECT A "LLC" (LIMITED LIABILITY CORPORATION)

• When the business is a partnership.
• When real estate is owned for investment purposes.
• When several entities own the business.
• When looking for complete protection of the owner’s.
• personal liability.