Business Entities
ENITY NAME |
CONTROL |
ASSET PROTECTION |
FEDERAL TAXATION |
|---|---|---|---|
SOLE PROPRIETORSHIP |
Owner has complete control. |
Owner is personally liable for all business activities. All personal assets are at risk for business activities.
|
Owner reports all income or loss on his personal tax return (1040 Schedule C). |
GENERAL PARTNERSHIP |
Partners have equal control unless stipulated otherwise by agreement. |
Owners are personally liable forall business activities. All personal assets are at risk for business activities. |
Flow-through. Business pays notax - all profits or losses are reported on partners tax returns. Files informational returns 1065 - partners receive K-1s.
|
LIMITED PARTNERSHIP |
General Partner(s) control business. |
General Partners are liable for business debts. Limited Partnershave no personal liability for business debts except for the amount they invested. Some states offer charging order protections for limited partners.
|
Same as General Partnership except that Limited Partners receive passive income. |
CORPORATIONS |
Officers run day-to-day operations. Board of Directors elects officers. Shareholders elect directors. |
Generally, there is no personal liability for shareholders, officers or directors. Nevada is the only state that currently offers charging order protection for certain shareholders in small corporations. |
C Corporations pay their own taxes at corprate tax rates on corporate tax returns (1120). Profits can be paid to shareholders as dividends. S Corperations profits flow to shareholders in proportion to their ownership (tax form 1120s is filed and K-1s are given to shareholders).
|
LIMITED LIABILITY COMPANY |
Can either be "member-managed" where the members manage or "manager-managed" where independent mangers manage (per the Operating Agreement) |
Owners are generally not liable for the debts of the business. Some states offer charging order protections as well, preventing owners' creditors form taking intrest in the LLC. |
Can be taxed as any of the above. An election is made to treat the Limited Liability Company as a corporations partnership of disregarded (sole proprietorship) via form SS-4. |
Retirement and Estate Planning Entities
We can facilitate the creation of land trusts for real estate, living trusts for estate planning and pension plans for retirement planning. We work with the professional organizations to ensure that all documents are drafted appropriately with an attorney when necessary to sure your goals are met. |
FOR QUESTIONS ABOUT ENTITY STRUCTURING,
PLEASE CALL: 1.888.969.BOSS
WE LOOK FORWARD TO THE OPPORTUNITY TO SERVE YOU.