One of the biggest reasons why many people don’t put additional thought into starting up a business is because they believe that it’s expensive to do so. In actuality, starting a business is far cheaper than these individuals realize. Of course the startup costs are dependent on the type of business you’re planning in terms of equipment and/or inventory. However, the initial paperwork to start your own corporation is quite nominal in comparison.
A C-Corporation is an entity that is taxed separately from those who set it up, such as owners and shareholders. It is regarded as a separate entity that can hold its own credit rating, liabilities and assets. Personal liens and debts cannot influence a C-Corporation’s assets or bank accounts because it is its own entity owned by the shareholders and not the founding individual.
Why You Would Want a C-Corp
Forming a C-Corporation has many advantages that are ideal for businesses. As there are many types to choose from, you should have an idea of what you need to form according to your ultimate goals. The C-Corporations have benefits such as:
Unlimited growth potential
Private shareholders and investor accountability
Perpetual existence – A C-Corporation has perpetual existence meaning that it will continue to operate even if the owner quits his or her position. The corporation will continue to conduct business as normal and doesn’t require the founding member to be a part of the staff. For example, Steve Jobs left Apple in 1985 although he was a founding member. Without his influence, Apple continued to conduct business.
Accountant, attorney, and B Corp movement supporter Senen Garcia, Esq. got his entrepreneurial start at an early age. The sole owner of two businesses before completing his bachelor’s degree in Business Administration with a concentration in Entrepreneurship and International Business, Garcia opened his accounting and tax practice before receiving his undergraduate degree. While running said business, he completed his Graduate and Juris Doctorate degrees and now operates SG Law Group in Florida which assists clients with their corporate, real estate, estate planning an property insurance claim needs.
Today he’s giving us a look at how he got interested in the B Corp movement, what he believes Benefit Corporations need in order to succeed and why the real benefit behind the B Corps has a lot to do with marketing.
One of the first decisions every business owner needs to make is what entity to file their business as, and that choice is typically between LLCs vs. Corporations. Really the decision comes down to what fits the needs of the business owner and the business, but there is still discussion on which entity is best. Here at MyCorp, we gathered together a panel of professionals to get their expert advice on LLCs vs. Corporations and which is the best to form for your business. Which side are you on?
1. “Generally speaking, corporate status is preferable. Banks typically don’t view LLCs as favorably during the loan application process and corporations don’t pay taxes on fringe benefits. These include group-term life insurance, medical reimbursement plans, medical insurance premiums, and more.”
Do you have plans to launch a brand new small business? Are you ready to take the dive toward a profitable and rewarding future? If you intend to become a newly crowned business owner, it is vital to ensure you know what types of business structure options exist so that you choose the one that is most appropriate for you. This includes understanding how each type of business entity is taxed. One option is to go with a C corporation, which is considered the most traditional type of business structure.
When it comes to filing federal taxes, the IRS treats C corporations as separate business entities. A C corporation can be created when there is an exchange of money or property among prospective shareholders who make up a business. This is done for the capital stock of the business. The advantage of a C corporation is that it typically can claim more tax deductions than the ones available to sole proprietorships or partnerships when calculating their amounts of taxable income. Tax deductions can lead to big savings, helping small business owners hold on to more of the income their companies bring in.
Entrepreneurs, take note! There’s big news on the B Corporation front – this August, Delaware became the 19th state to enact benefit corporation legislation, a move that signals the new business entity’s staying power.
While it’s true that 18 other states and D.C. are already on board the B Corp train, Delaware has an especially longstanding, notable reputation as a corporate haven, and as an important and influential player in the business community. In other words, people in business pay extra attention to Delaware, and when Delaware passed benefit corporation legislation, it was a very big deal. The state’s legal recognition of benefit corporations will spark more momentum for a movement that aims to sink legal teeth into the notion that companies should mold their missions to benefit society as a whole, instead of primarily focusing on maximizing profits for shareholders.
No, you aren’t having Déjà vu - we’ve done a business basics on B-Corps before. However, we decided to revisit the benefit corporation because there are still so many question surrounding the new structure. In just a few short months, eight more states have enacted legislation to recognize benefit corporation, bringing the total up to twenty, if you include D.C. And, as more and more people weigh the pros and cons of forming a B-Corp, the inevitable question of ‘how do you even run one of these things?’ is bound to come up. Happily, running a B-Corp isn’t much different than running any other type of corporation.
Before you receive the hard-earned title of being a newly crowned business owner, you must weigh the different types of business entities available to you. Each entity is designed uniquely when it comes to how the IRS treats it. Considering the tax obligations that apply to each entity is a must to make a wise business decision. 1800Accountant.com, one of MyCorporation’s partners, offers a few pointers to consider on how LLCs are structured and taxed. Continue reading →
Today, our guest poster Justin Krane offers up a step by step plan on how to stay on top of your taxes and how to avoid putting them off till the last minute. Additionally, you can join Justin and our CEO Deborah for an amazing financial webinar on May 29th at 1PM PST/4PM EST. In this webinar, Justin will teach you how to create high quality goals and the financial strategies to put in place to work towards achieving them. You in? We are! Register by clicking here.
You are trying to back away from them but their stank is just ridic? They have no idea how bad their breath is! Especially when they eat the onion bagel with lox cream cheese! You’ll do anything to avoid their halitosis.
Got me thinking. Do your taxes have bad breath? Your taxes only end up stinking if you put them off till the last minute. It stinks to have no idea how much money you owe the IRS. Give your taxes a breath mint! No more scrambling the last few days before taxes are due. No more tax surprises. No more bad breath.
How you plan your taxes is most likely how you plan your financial life. It’s time to be proactive, not reactive! I want your financial life to be easier for you. Continue reading →
For this week’s post we will get to know one the incorporation options a bit better and learn what it has to offer a new entrepreneur: the S-Corporation!
First off, what is an S-Corporation?
Well, an S-Corporation (also known as the S-Corp) is a special type of corporation that draws its designation from subsection S of the tax code. To start an S-Corp, a small business owner starts a C-Corporation in the state where it is headquartered, then files for S-corporation status with the IRS. While an-S Corporation is similar to a C-Corporation, it has different income and self-employment tax regulations. Continue reading →
Welcome to our weekly business basics post! This week we decided to explore a specialized legal entity called a professional corporation (PC). Now most of those who know a little bit about corporate law probably know that there are two, main types of corporations – S-Corps, and C-Corps. But in addition to these, there are a few other specialized structures that are important to keep under the belt of a small business, like the professional corporation.