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Sole Proprietorship

A sole proprietorship is owned and operated by one individual. It is the least complicated and usually the least expensive way to set up and run a business. Apart from its owner the sole proprietorship has no legal existence. ADVANTAGES: The advantage of a sole proprietorship is its simplicity and the relative freedom from government […]

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A recent study concluded that a new partnership is four times as likely to succeed as a new sole proprietorship. A local business law professor defines a partnership as “a law suit in the making.” Whichever view you subscribe to, knowing the pros and cons will give your partnership a better chance to be successful. […]

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“C” Corporation

The regular, or “C” corporation is the most complex of the business structures. It is a distinct legal entity apart from the shareholders who own it. Formed under the requirements of the state in which it will do business, a corporation limits its owners’ liability to their investment in the company. While personal assets are […]

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Limited Partnership

In the limited partnership form, a general partner or partners run the business and are fully liable for partnership obligations. Limited partners do not participate in the business, that is they cannot obligate the business, and are generally liable only to the extent of their investment.

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“S” Corporation

The major difference between a regular “C” corporation and an “S” corporation is that the “C” corporation pays taxes on its income and an “S” corporation doesn’t. The “S” corporation files Form 1120S and distributes K-1s to shareholders. Shareholders then report their pro rata share of income, losses, and credits on their individual tax returns. […]

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Limited Liability Company (LLC)

This is a business structure which became available January 1, 1993. It can function like a partnership, or sole proprietorship, where partners/sole proprietors are not liable for its debts and obligations. With a special election a Limited Liability Company can function as a Corporation.

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Personal Service Corporation

A special kind of corporation, known as the personal service corporation, has the added drawback of paying tax on corporate income at a flat rate (the top corporate rate) rather than at the graduated rates available to other corporations. A personal service corporation is a corporation that has employee-owners performing services in the fields of […]

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