CORPORATION VS SOLE PROPRIETORSHIP
Should your business become a corporation? As a Sole Proprietorship business man or business woman, you need to ask yourself this question during the start-up of your company. NOW YOU need to know about incorporating in YOUR business.
Jim has started a landscape business, as a sole proprietor. The name of the company was Jim's Landscape Service. He worked from sunrise to sunset to build up the business. After 3 years of hard work, it finally paid off. His company was making a lot money and keeping 30% as profits, and he also built a huge customer database. Jim had it made, until his a part-time employee had "an accident" that wiped Jim's Landscape Service out of business.
In a short time of five (5) months, Jim's dream business came to a stop, and he lost all of his customers because they heard about the accident. Jim had tried to get the business going again and just when he didn't need any more problems, he got a lawsuit filed against him, since he was the sole proprietor of his business. Jim's personal and business life was destroyed. Jim lost all of his trucks, equipment, savings, and home. He couldn't raise any money to keep the business going.
If Jim had his company incorporated, HIS BUSINESS and PERSONAL LIFE would have been separated and had an additional layer of protection.
Additional Corporation Benefits
Are you paying too much in taxes and putting your personal property at risk by not having the correct business structure? Most businesses start as a sole proprietorship because the set-up is easier. However, it can be one of the biggest mistakes one can make.
S corporation, C corporation:
No Corporate Income Tax
No Personal Income Tax
No Franchise Tax
Personal property protection from the business
Corporate assets protection from the owners and officers
Easy to build Corporation credit profile
Easier to raise money for Corporation
Corporate resources enable individual investors
Corporation produces several tax benefits
IRS Audits are at a lower risk
These are just a few of the benefits you receive by your business being a "S" Corporation or "C" Corporation
Don't put it off any longer. Can you take that liability risk? I hope not. E-MAIL US TODAY!
LIMITED LIABILITY COMPANY VS. SOLE PROPRIETORSHIP:
A limited liability company is a relatively new form of business entity. Limited liability companies are becoming more popular
with a sole proprietorship business, and it's easy to see why.
Limited Liability Company and a Limited Liability Partnership: what is the difference?
The Limited Liability Company consists of one or more members, who may be individuals, partnerships, limited partnerships, trusts, estates, associations, corporations, other limited liability companies or other business entities. Members of a limited liability company are similar to shareholders of a corporation and have pass-through taxes that are comparable to a partnership.
The Limited Liability Partnership consists of two or more partners: at least one general partner and one limited partner. The general partner is potentially liable for all the obligations of the partnership, while the limited partner has limited liability. Limited partners may jeopardize their limited liability status if they actively participate in the business of the partnership.
The Limited Liability Company can be taxed in many different ways when you make a election with the IRS. The income or loss from your Limited Liability Company can be taxed to you personally or can be taxed on an individual basis at a lower rate.
In other words, your Limited Liability Company pays NO FEDERAL INCOME TAX.
Personal liability is limited to the amount of the owner's or manager's investments in the Limited Liability Company.
Personal liability offers the protection of a corporation with the tax benefits and simplicity of a partnership. Owners or members of a Limited Liability Company are not personally liable for its debts and liabilities and also have the benefit of being taxed only once on their profits. Also, the managers and members of the Limited Liability Company don't have to have regular meetings.
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P. O. Box 94114
Las Vegas, Nv. 89193-4114