If you are looking to turn your business into an incorporated one or need legal advice on how to incorporate, then your corporation lawyer can help you to get started. A corporation lawyer will be able to help you to turn your business into either a C and S Corporation or a Limited Liability Corporation. Incorporating your business will give you tax advantages, liability protection, as well as others. The following information from your lawyer discusses how to incorporate your business and why it may make sense to do so.
Different Types of Business Structures
Over the past few decades, there have been significant changes to legal business structures that are available to business owners. In the past, the only direction that businesses could really take were to become partnerships or corporations. Corporations were also limited by the Internal Revenue Service by what type and how many shareholders they are allowed to have. The most recent type of business structure that has been created is a Limited Liability Corporation, or an LLC. An LLC will give both owners a liability protection as well as a favorable taxation pass. While forming a Limited Liability Company, incorporation may be beneficial for the business owner, but they can be costly to form.
Forming an LLC
An LLC is a legal entity that is separate and offers the owners protection. Both liability protection and a flexible taxation system are both offered in an LLC. This helps to bridge any gaps between the partnerships and the corporation. Your corporation attorney will be able to advise you which direction may be best for you to take with the flexible taxation that is offered with an LLC. An LLC will allow for you to select a management structure that you feel would be best for your business to operate successfully with. With an LLC, you are able to operate your business as a complex corporate structure on down to a more simple partnership. The choice is yours to decide. While an LLC may seem like the best business structure available, choosing a corporation may still come with some benefits for your business. A corporation provides protection to you from debts and liability. In a corporation, it is also easier to raise capital funds when compared to an LLC.
The Process of Incorporating
The formation of a regular corporation and a limited liability company have a very similar process. The first step is to draft a document called Articles of Formation, which is comparable to the Articles of Incorporation document. In order to incorporate, you will need to file both of these documents with your Secretary of State. An LLC is bound to less operational formalities than a normal corporation is. A formal corporation is required to hold meetings for their shareholders and record the minutes of these meetings. They are required to hold these meetings on an annual basis, as a minimum. It is not required for a limited liability company to hold these same meetings; however, your corporation attorney may recommend it.
The corporation is one of the first modern business structures still in existence. A corporation offers the ease of raising capital funds, strong liability protection, duration, and the ability to easily transfer it. Once your business is incorporated, it becomes a distinct entity. This entity is entirely separate from you and any others who are part of the corporation. Your corporate attorney will be able to assist you in deciding if your business should be incorporated into one of the two major types: an S corporation and a C corporation. An S corporation refers to the classification of tax for a pass-through taxation. That means that the S corporation is not taxable. Any income and loss for the corporation will be handled through your personal income taxes. The number of shareholders are also limited in an S corporation. A C corporation can be either a Close corporation or a Professional Service corporation. Close corporations typically have very few shareholders and are small. Professional Service corporations can include professionals such as doctors. Both corporations are responsible for their taxes on their income.
Non-Incorporated vs. Incorporated Companies
Based on the information given, it may seem like an LLC would be the best move for a business. An LLC offers strong liability protection, good flexibility, and options for your tax classifications. In most states, an LLC can consist of just a single member. This will offer the same sort of benefits that a sole proprietorship would. If you choose to add partners, then it would be similar to a traditional partnership. There are some states that will not allow a single person to be an LLC. If this is the case in your state, it is recommended that you bring someone you trust into the LLC. If you choose to go this route then you can make an agreement between the two of you stating that all decisions will come from the proprietor. They can essentially be your business partner in name only. Your corporation lawyer will be able to assist you in determining what you need to do in order to become an LLC, if that is what you would like your business to be.
Consult with Our Corporation Lawyer
Why struggle with how to incorporate your business when you can rely on the professional experience of your corporation lawyer? Filing for a corporation status could be confusing and tedious. Leave it to the professionals at the Sutton Law Center to help you make the best decision for your business. The attorneys at the Sutton Law Center have the skills and knowledge that you can rely on to help you make the right decision in with incorporating your business. Call the Sutton Law Center at (775) 824-0300. The Sutton Law Center has the trusted attorneys who have the experience to help you make the best informed decisions when it comes to incorporating your business. Call today for your consultation!