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Llc Corporation Partnership

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Llc Corporation Partnership document sample

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									Legal Entities
            Presented by:


  Sue Grover, CPCU, APA, CIPA
Major Types
   Sole Proprietorship
   Partnership
   Corporation
   LLC
   Other
Sole Proprietorship
   Principal: Owner
       Only one (Sole proprietor)
       A spouse cannot also be an owner
       How paid: Draw
       How taxed: Schedule C (not on 941)
       Classify as an employee (according to
        duties) / Payroll split – company decision
       Premium basis - (flat amt vs min/max)
       Excluded in most states
Sole Proprietorship
   Records / Special Considerations
       Cash Disbursements (check book)
       Schedule C (Form 1040) – should always
        be reviewed
       DBA (no affect on the audit)
       Family members
            Unpaid, but active – generally included,
             depends on the state ($=similar employee)
            Paid, but inactive – generally excluded
Partnership
   General Partnership
   Other types:
       Limited Liability Partnership
       Limited Partnership
Partnership
   Principals: Partners
       2 or more
       How paid: Draw
       How taxed: Form 1065, K-1 (not on 941)
       Classify as an employee (according to
        duties)
       Premium basis - (flat amt vs min/max)
       Excluded in most states
Partnership
   Records / Special Considerations
       Cash Disbursements (check book)
       Form 1065, K-1
       DBA (no affect on the audit)
       Family members
           Unpaid, but active – generally included,
            depends on the state ($=similar employee)
           Paid, but inactive – generally excluded
Corporation
   Types:
       Public vs private
       C Corp
       Subchapter S Corp
Corporation
   Principals: Officers
       President, Vice President, Secretary,
        Treasurer
       Also Sr VP, Exec VP, Asst, CEO, CFO, etc.
       In accordance with the by-laws or
        corporate minutes
       Executive Director – usually NOT a
        corporate officer (NOT subject to min/max)
Corporation
   Principals: Officers, contd
       How paid: Payroll
       How taxed: 941
       Classify to the principal operations
        (exceptions: supt/foreperson or
        construction)
       Premium basis – total payroll (min/max)
       Included in most states (but may elect to
        be excluded in many)
Corporation
   Special considerations, Officers
       Can exclude if ―inactive‖ / Rule 2.E.1.b.(5),
        Payroll is excluded when . . .
            The executive officer is elected for the value of
             his/her name or because of stock holdings, has
             no duties and does not visit the premises,
             except perhaps to attend directors' meetings.
            The executive officer ceases to perform any
             duties and does not visit the premises, except
             perhaps to attend directors' meetings.
Corporation
   Special considerations, Officers, contd
       Flight duties / Rule 2.E.1.b c.
            (1) For each week that the executive officer
             did not perform flight duties, assign the
             executive officer's payroll to the classification
             that applies to the principal operations in which
             the executive officer is engaged.
            (2) For each week that the executive officer
             performed flight duties, assign the officer's
             payroll for that week to Code 7421—Aviation—
             Flying Crew. (Unless subject to a higher rated
             classification, then assign that higher rated
             classification for that week.)
Corporation
   Special considerations, Officers, contd
       Flight duties, contd
            (2),contd Note: The above rules apply on
             the basis of the pilot's logbook, which is
             required under federal regulations, or on the
             basis of verifiable records.
            (3) If Code 7421—Aviation—Flying Crew
             applies and verifiable records are not kept to
             indicate those weeks during which flying is
             performed by the executive officer, assign the
             executive officer's payroll to the highest rated
             classification that applies to any of their duties.
Corporation

   Special considerations, contd
       Multiple corporations - considered a single
        unit with respect to the application of the
        executive officer rule
LLC
   Types
       Single Member –
           Owner - files a 1040
           Corporation - files an 1120 or 1120S
       Multiple Member –
           Filing varies by state (partner or corporation)
LLC
   Principals: Members (or Managers?)
       Members - the owners of LLCs. Members
        can be individuals, corporations, other
        LLCs, trusts, pension plans, etc.
       Managers - appointed by the members to
        manage the LLC. They are treated as
        employees (not limited).
LLC
   Principals: Members, treated as Partner
    or Officer (varies by state)
       How paid: Varies by state
       How taxed: Varies by state
       Classify: Varies by state
       Premium basis: Varies by state
       Excluded/Included: Varies by state
Questions
   Sue Grover – contact information
       sgrover@cws-gr.com
       800-523-8501, x7948
       651-653-5665

								
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