{"id":161,"date":"2018-12-12T02:52:48","date_gmt":"2018-12-12T07:52:48","guid":{"rendered":"http:\/\/localhost\/newapp\/?page_id=161"},"modified":"2018-12-12T03:28:42","modified_gmt":"2018-12-12T08:28:42","slug":"business-corporations","status":"publish","type":"page","link":"https:\/\/newyorklawgy.com\/?page_id=161","title":{"rendered":"BUSINESS\/CORPORATIONS"},"content":{"rendered":"\t\t
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BUSINESS \/ CORPORATIONS <\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Sole Proprietorship<\/b><\/u><\/h3>

The individual owner of an unincorporated business operates the business as an extension of himself. The profits and losses of the business are reported on the tax return of the owner – there is no separate business filing. The owner is personally responsible for any liabilities of the business. If someone sues the business for breach of contract, personal injury, or to collect a debt, the court can directly levy the personal bank account and other property of the owner. The major advantage of sole proprietorship is that it is the simplest and least expensive structure, as there is really nothing to set up and maintain.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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C-Corporation<\/b><\/u><\/h3>

A corporation is owned by one or more stockholders, managed by a board of directors elected by the stockholders, and run day-to-day by officers appointed by the board of directors. A single individual can be the sole stockholder, director and officer of the company. The stockholders, directors and officers of the company are protected from the liabilities of the company, or their own negligence, when acting in their corporate role. In a \u201cC\u201d corporation the profits and losses of the corporation are not passed through to the tax returns of the owners. The corporation files its own tax return and pays its own taxes. It may also be subject to state franchise taxes or other annual fees.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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S-Corporation<\/b><\/u><\/h3>

After the corporation has been formed, the stockholders may elect “S Corporation” status by making a filing with the IRS. An S Corporation is taxed like a \u2018partnership\u2019 and the profits and losses of S Corporations flow through to the federal tax returns of the owners in proportion to their stock ownership. The S-corporation structure is generally preferred over a standard corporation when most of the shareholders are involved in its day-to-day activities, and the corporation distributes most of its income to its shareholders; in other words, for small businesses.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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Limited Liability Company (LLC)<\/b><\/u><\/h3>

An LLC consists of members, rather than shareholders. The ownership percentages, profit and loss distributions, and voting powers of each member are determined by the LLC \u201cArticles of Organization\u201d. An LLC can choose to be taxed like a partnership, or S Corporation with profits and losses flowing through to the owners\u2019 tax returns, or taxed like a C Corporation, filing its own return. The owners and any officers and directors are further protected from the liabilities of the company, as in a corporation. An LLC is generally subject to franchise tax, though this varies from state to state.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Non-Profit Corporation<\/b><\/u><\/h3>

A non-profit corporation does not have to be a “charity”. A non-profit corporation may be an industry association, a social organization, a research firm, or even a consulting group. It can even sell products or services. The difference is that there are no owners, and any “profits” are simply retained by the corporation to be re-invested for whatever the purpose of the corporation may be. A non-profit can have employees, and those employees can be paid fair market value for their services. There are many restrictions on non-profits that make it a challenging choice.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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Professional Corporations (PC’s), Limited Liability Companies (PLLC’s)<\/b><\/u><\/h3>

These are special entity forms created for lawyers, doctors, CPA\u2019s, architects, engineers and other professionals subject to licensing requirements and malpractice liability. They are similar to the standard forms, except that usually the appropriate state licensing body must approve the formation documents before they are filed with the Secretary of State.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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General Partnership<\/b><\/u><\/h3>

Two or more people own the business jointly and share profits and losses of the business as spelled out in the \u2018partnership agreement\u2019. Each partner is potentially responsible for the full amount of all liabilities of the business, i.e., a creditor can collect the full amount of a debt of the partnership from the partner that is the easiest to collect from. Distribution of profits and losses is determined by the partnership agreement and passes through to the individual partners. It does not have to match the ownership percentages. The partnership itself is not subject to any income or franchise tax. Control of the business is determined by the partnership agreement, but unless stated otherwise, the partners control the business jointly, with each partner having an equal vote. An advantage of partnerships is that, like a sole proprietorship, no state filings are required to create the business entity, nor are there any ongoing reporting requirements.\u00a0<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

BUSINESS \/ CORPORATIONS Sole Proprietorship The individual owner of an unincorporated business operates the business as an extension of himself. The profits and losses of the business are reported on the tax return of the owner – there is no separate business filing. The owner is personally responsible for any liabilities of the business. If […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":[],"_links":{"self":[{"href":"https:\/\/newyorklawgy.com\/index.php?rest_route=\/wp\/v2\/pages\/161"}],"collection":[{"href":"https:\/\/newyorklawgy.com\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/newyorklawgy.com\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/newyorklawgy.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newyorklawgy.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=161"}],"version-history":[{"count":4,"href":"https:\/\/newyorklawgy.com\/index.php?rest_route=\/wp\/v2\/pages\/161\/revisions"}],"predecessor-version":[{"id":219,"href":"https:\/\/newyorklawgy.com\/index.php?rest_route=\/wp\/v2\/pages\/161\/revisions\/219"}],"wp:attachment":[{"href":"https:\/\/newyorklawgy.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=161"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}