• Personal asset protection: Both corporations and LLCs allow owners to separate and protect their personal assets. In a properly structured and managed company, owners should have limited liability for business debts and obligations.

• Additional credibility: Adding "Inc." or "LLC" after your business name can add instant authority. Consumers, vendors, and partners may prefer to do business with an incorporated company.

• Name protection: In most states, other businesses may not file your exact corporate or LLC name in the same state.

• Perpetual existence: Corporations and LLCs continue to exist, even if ownership or management changes.

• Tax flexibility: Though profit and loss typically pass through an LLC and get reported on the personal income tax returns of owners, an LLC can also elect to be taxed as a corporation. Likewise, a corporation can avoid double taxation of corporate profits and dividends by electing Subchapter S tax status (S Corporation).

• Deductible expenses: Both corporations and LLCs may deduct normal business expenses, like salaries, before they allocate income to owners.

• Free autographed copy of Incorporate and Grow Rich book
• Toll - FREE Customer Support
• FREE Ongoing Support for Life of Entity
• FREE Ongoing Education
• Clearance of Company Name Prior to Filing
• Preparation and Filing of Articles of Incorporation or Organization
• State Filing Fee
• Federal Tax ID Number
• First Year Registered Agent Service (NV, WY & CA only)
• Deluxe Minute Book
• Personalized Stock/Membership Certificates
• Personalized Minutes/Resolutions Bylaws/Operating Agreement
• Corporate Seal
• Stock Transfer Ledger

We Educate,YOU Decide...


Sole Proprietorship, General Partnerships (LPs), Limited Partnerships, The Professional Corporation, Nonprofit or Not-For-Profit, C Corporations, S Corporations or Limited Liability Company (LLC)

The Sole Proprietorship:
When you run your business as a sole proprietorship, you are the business. In essence, you (as the owner of the business) and your business are one and the same. Your assets are the business' assets, and the business' assets are your assets. The same applies for liabilities. Your debts and the business debts are one and the same. If your business is sued, it is the same as if you are sued. Conversely, if you are sued personally, your business is sued. Everything you own and everything your business owns are up for grabs in a lawsuit. The same applies regarding the IRS. You file one tax return because all the income is yours. You pay self-employment taxes (15.3 percent at the bottom of Schedule C) before any deductions. This is true whether you use your name or a business name. When you use a DBA
(Doing Business As), you and your business are still one.

The General Partnership:
When you enter into an agreement (verbal or written with another party to do business together), you are acting in partnership with one another. All is operated as if it were one person. This is like a sole proprietorship, except with twice the exposure. Each is responsible for everything each of you own, owe, do and have done. You have joint and several liability with your partners. This means you are completely liable for everything, whether you are involved or not.

The Professional Corporation:
Although most of us consider ourselves professionals in our fields, there is a select group that the IRS considers "professional." These professionals in the fields of health, veterinary services, law, engineering, architecture, accounting, actuarial science, performing arts or certain consulting services are admired so much that when incorporating, they are required to file as a professional service corporation. This PSC category is also "admired" with its own flat tax category of 35 percent.

Your options for relief as a "professional" are few, but can be effective. As mentioned above, the S corporation is a viable alternative. Another route to take is forming a C corporation that can contract with the PSC for services such as advertising, marketing, purchasing, bookkeeping, office retail and maintenance to name a few that could spin off income and lower PSC taxes.

Nonprofit or Not-For-Profit Corporations:
All nonprofit corporations have three characteristics in common:

1. They are designated as "nonprofit" when organized.
2.  Profits or assets cannot be divided among corporate members, officers or directors as corporate share dividends.
3. They may lawfully pursue only such purposes as are permitted for such organizations by statute.

There are three categories:

1. Public benefit (such as museums, schools and hospitals)
2. Mutual benefit (such as cooperatives, trade or professional associations and clubs)
3. Private benefit (such as tax-exemption-benefit-seeking-organizations -- low- cost housing developments and the like.)

C Corporation
A C Corporation is a completely separate tax and legal entity from its owners, and owners who work in the business are treated and taxed as employees of the corporation (Note: The "C" in C Corporation refers to a subchapter of the tax code; C-Corporations are one of the most common firms of corporations, and they are frequently referred to generically as corporations).

C Corporations are subject to corporate income taxes separate from the owners, where most other forms of business entity allow for the company profits to "pass-through" to the personal income tax statements of the owners. As such, C Corporations are the most formal business entity and they have greater tax reporting responsibilities than other business entities. C Corporations allow for profits to be retained in the business, if desired, and frequently these profits can be taxed at a lower rate than personal income. C Corporations can also pay out after tax profits to its owners in the form of dividends, but this can also lead to double taxation.
 
C-Corporation Advantages

• Limited Personal Liability
• Perpetual Existence
• Better Fringe Benefits
• Advantageous Corporate Tax Treatment/Income Splitting

C-Corporation Disadvantages

• More extensive record keeping requirements
• Dividend payments can lead to double taxation

S Corporation
An S Corporation is a special form of corporation (Note: The "S" in S Corporation refers to sub chapter S of the tax code). S Corporations are based on C Corporations but they are not treated as a separate tax entity as C Corporations are. Instead, the income of an S Corporation is "passed through" to the personal income of its owners (shareholders) in proportion to their ownership interest.

An S Corporation is created by forming a traditional C Corporation and then filing the IRS form 2553 (The Subchapter S Election) for federal recognition of S Corporation tax status. While the S Corporation has many of the same features as a C Corporation, there are some important differences.

While the S Corporation features similar pass through taxation to an LLC, in the area of self-employment taxes an S Corporation can have an advantage over an LLC. The compensation (salary and bonuses) of S Corporation shareholders is subject to self-employment tax, but not on the profits automatically allocated to them as a shareholder.

S-Corporation Advantages

• Limited Personal Liability
• Perpetual Existence
• Better Fringe Benefits
• Pass-Through Taxation

S-Corporation Disadvantages

• More Extensive Record Keeping Requirements
• Restrictions on Number and Type of Allowable Shareholders