Starting a New Business or Organization

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					Starting a New Business or Organization?

                      When launching a new venture, one of the first questions that
                      needs to be answered is: "What type of entity should it be?" The
                      options are numerous and you need to choose a legal structure that
                      best suits your enterprise. Read the article below to learn the six
                      basic business ways to conduct your operation.

When starting a new venture, there are a variety of entity choices —
although some will be easily ruled out based on your operation. Most entities are governed by
state statutes, with federal income tax rules and regulations also coming into play. The six basic
entities are:
             A sole proprietorship is owned by one person, who may also be the only
        worker. Note that a sole proprietorship is not a separate legal entity. The owner
        receives all profits, bears all losses, and is personally liable for legal claims that
        arise from accidents, faulty merchandise, employees, unpaid bills and other
        business problems.

             A general partnership involves two or more
        owners who make decisions for the business
        together. Partners share profits, losses, and liability.
        Although a partnership can be very informal, it is
        generally considered a legal entity under applicable
        state law.

             A C corporation is a legal entity owned by its
        stockholders united under a common name.
        Corporations issue stock and elect a board of
        directors to manage the company. Shareholders
        have limited liability for the obligations of the
        business. Corporate income is taxed twice. The corporation distributes its
        earnings as dividends to stockholders, who must include the dividends as
        personal income on their tax returns.

              An S corporation limits the number of stockholders to 100. Many small
        companies choose this option, because it's a good way to avoid the double
        taxation of corporations and also provides limited personal liability for the
        owners. However, there are some restrictions placed on S corps. For example,
        there can be only one class of stock and the corporation must be domestic.

             A not-for-profit organization is set up with a specific mission to improve
        society, such as a museum, charitable foundation, religious organization,
        research group or trade association. It is not an option for a regular for-profit
business. Not-for-profit organizations generally do not pay taxes on their
income, cannot sell stock or pay dividends, and have strict requirements
imposed on their activities.

      A limited liability company gives owners protection from the claims of
business creditors and others. Individual LLC members' liability for business
debts is limited to the value of their interest in the business — hence the name
"limited liability."

   In addition, there are sub-entities within some of the above six
categories. Contact ASAP to discuss the options. We can help decide
  which one is right for your operation.

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