General Business (Legal) Stuff Archives - Page 4 of 10

Can I cause my corporation to be an S Corp at the end of the year, after I see how my year has been?

You wish. But no. Congress treats this election as a go-forward business decision, not a look-back election. The good news is that it’s easy to revoke, or even “bust”, the election. But be careful about switching back and forth – as in, things don’t work that way.

August 10th, 2015|0 Comments

I’m causing my corporation to elect to be taxed as an S Corporation. Does my spouse have to sign?

You’re going to get different answers, depending on the advisor you ask, and the state you’re in. Generally, though, best practice is yes, and sometimes required. PS - If you're keeping this a secret from your spouse, then an S Election is not your biggest problem.

August 10th, 2015|0 Comments

Do I need all of the shareholders’ consent for the S Corp election?

Yes. It’s really that simple. Here’s a link to the IRS page that’s chock full of info. PS - Spouses too.

August 10th, 2015|0 Comments

What are the downsides of using an S Corporation?

First, please take a look at this FAQ. Once you understand why you may want to use a C Corporation, you’ll understand several of the reasons that an S Corporation may not work for you. Next, other downsides include not being able to have more than 100 shareholders, and not being able to have non-individual [...]

August 9th, 2020|0 Comments

How can I get my LLC to be taxed as a partnership?

Whew! A good question with a simple answer. When an LLC is formed with two or more members, it’s automatically taxed as a partnership. That’s it!

April 8th, 2020|0 Comments

Can partners in a partnership get a W-2 and be “treated like an employee” like they can in an S Corporation?

Short answer: No. Long answer. When you turn one of your employees into a partner, that individual will switch from receiving a W-2 to getting a Schedule K-1. If you want your “partners” to be treated like an employee, then an S Corporation is the preferred approach (after you’ve determined that a C Corporation is [...]

August 9th, 2020|0 Comments

Is my business big enough to justify the additional overhead of a corporation or LLC?

“Big” is a relative term. Size isn’t always the only, or even a significant, element to determining whether you should entity-ize your business. If you run a small business, but it’s a high-risk business, like, for example, a liquor store, then an LLC or corporation is probably a good idea, regardless of your revenue.

July 12th, 2015|0 Comments

What are the advantages of a C Corporation versus a sole proprietorship?

Short question . . . long answer. For the most part, the classic answer, which is also correct, is a C Corporation (or an S Corporation) provides limited liability for its owners and management. An S Corporation could provide additional tax benefits. On a less obvious level, having your business in a corporation may provide it with more “respect” in the business community, and may fend off nuisance suits.

July 12th, 2015|0 Comments

What are the advantages of operating my business through an S Corporation?

Top three reasons: Tax. Tax. Tax. Which is why they were created to begin with back in the day (1958), to encourage small business creation in the U.S. An S Corporation has a “single layer” of tax, i.e., unlike C Corporations (which is what all corporations formed in the United States are unless they make [...]

September 2nd, 2020|0 Comments

How do I establish a sole proprietorship?

Establishing a sole proprietorship isn’t complicated since there are no filings to establish a sole prop business. Lots of folks just open their doors and do business, and that’s it. There are other tasks that need to be performed, like getting a business license and (sometimes) filing/publishing a fictitious business name statement if you’re going [...]

September 2nd, 2020|0 Comments

Subscribe to Articles & Postings via Email

Recent Posts

Recent Comments

Article Categories

FAQ Categories