Aug 01, 2022
In Self Help Forum
How taxes work: LLCs have the benefit of a "flow-through" tax treatment, meaning that the owners – not the LLC are the ones who are taxed. Having only one level of tax imposed makes taxes easier. Find IRS tax forms here. 4. Corporation Example: Microsoft, Coca-Cola, Toyota Motor, and almost all well known businesses. What it is: A legal entity that is separate and distinct from its owners, and has most of the rights and responsibilities that an individual possesses (to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets, and pay taxes.) It's more complex than the other business structures, and it's generally suggested for larger, established companies with multiple employees. Pros: They make seeking venture financing easy. They also provide the best protection for personal assets, as the founders, directors, and stockholders are (usually) not liable for the company's debts and obligations only the money and resources they've personally invested. Cons Because they're much more complex than other business structures, they can have costly administrative fees, and more complicated tax and legal requirements. How taxes work: Corporations are required to pay federal, state, and in some cases, local taxes. There are two different types of corporations: "C corporations" and "S corporations." C corporations fax number list are subject to double taxation – so any profit a C corporation makes is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. The corporation does not get a tax deduction when it distributes dividends to shareholders. Shareholders cannot deduct any loss of the corporation, but they are also not responsible directly for taxes on their earnings just on the dividends they give to shareholders. Corporations, on the other hand, have only one level of taxation. Learn more about the difference between "C corporations" and "S corporations" here, and find IRS tax forms here. How to Register a Business Name Make sure the name you want is available in your state. Conduct a trademark search. If you are a new corporation or LLC, your business name will automatically be registered with your state when you register your business. If you are a sole proprietorship, partnership, or existing corporation or LLC, register a 'Doing Business As' (DBA) name. File for a trademark when you've chosen an original name.