Setting Up Your Small Business
For many people, part of the American dream is having the opportunity to own his or her own business. That business is your livelihood. It is how you pay your bills, how you support your family and how you plan to raise funds to retire. It is essential to make the right decisions when setting up your business to protect it as well as your personal assets. You’re probably wondering:
Should I incorporate or form an LLC?
Deciding whether to incorporate or form a LLC is important decision in the establishment of business. Researching the differences and the best route to take can be overwhelming, but an experienced business attorney can assist you through the process, and it doesn’t have to break the bank.
What are the Differences?
Incorporation – Incorporation helps plan for a business’s success for the long-term. It protects corporate assets unlike the options available to sole proprietorships or partnerships. It offers the opportunity to sell stock, plus significant tax savings. With more credibility as a business operation than a partnership or sole proprietorship, it has more success when it comes to capital investment and overall stability.
S Corporation – Shareholders report profit and loss on individual tax returns, then tax payments are made on distributions at their personal tax rate. To form an S-Corp, there cannot be more than 75 shareholders, and none of the shareholders can be nonresident aliens. Operating much like traditional corporations, S Corporations must adhere to specific guidelines. There are employment tax advantages offered by registering as an S-Corp as well.
LLC – A Limited Liability Company (LLC) offers a combination of features from a partnership and a corporation. It protects the ownership of the business from debt liabilities or other obligations, such as judgments that were incurred by the business itself. With the tax advantages of a partnership, the LLC does not pay taxes on profits. The owners pay taxes on their distribution of the earnings at their personal rate.
Partnership – A relationship between two or more people to carry out business operations, a partnership may come in different forms. There are general partnerships and limited partnerships. In a general partnership, the general owners that operate the business assume liability for business debts and obligations. In a limited partnership, the partners serve as investors only and do not control the company (nor are they liable for company debts and obligations).
If you have a small business or if you are establishing one in the Daytona Beach area, a visit to an experienced business attorney is in order. Call Heidi S. Webb Attorney at Law and schedule a free consultation to discuss which business set up works best for your individual situation. She can walk you through the process and file necessary paperwork. An experienced attorney who’s dedicated, caring, and affordable – Heidi Webb is the Daytona Beach area lawyer you’ve been looking for.