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Will You Add? - Differences Between LLCs and S-Corps
Many business owners or people who are about to start a business have idealistic views about their new venture. People who are experienced in business know that there are some basics and some fundamentals that you must get right if you are to succeed. This article outlines a list of "Street Smarts" which have been distilled from the knowledge and experience of many successful business people. Read them carefully!1. The fatal mistake of many business people – thinking that because they are a good mechanic, baker, accountant, that they understand what it takes to run a mechanical business, bakery business, accountancy busines
2. Must file annual report with Secretary of State, and a reporting fee of $25 and a statement of information are required 90 days after formation.
3. Must maintain corporate formalities such as: Drafting Bylaws, Minutes, Annual Meetings, issuance of stock, to keep a paper a trail of financial dealings between the corporation and its shareholders, and to avoid “piercing of the corporate veil.”
D. Other Characteristics
1. No more than 100 shareholders
2. Shar
If you have ever simply watched people at work you will find that many often come in late or miss work entirely for days on end. We may be able to draw a connection in our reasoning that says all these people showing up 10 minutes late can add up to lots of lost revenue for the company. The problem is how to control attendance issues and still treat everyone fairly?A CCH study on unexcused absenteeism indicates that 83% of employers feel that unexcused absenteeism will continue to rise. The problem is that absenteeism costs have been growing which now range around $800 per employee per year. It doesn’t seem like much but wh
I. S-Corporation
A. Liability
1. Shareholders granted personal protection from debts and liabilities of business (like c-corp and LLC)
B. Taxation
1. Pass through: Profits and losses pass through the corp and reported to the individual tax return of shareholder (same as partnership and LLC)
2. Self-Employment Tax Break: Profits of the S-Corp which pass through to the shareholders are not subject to self-employment tax (Social Security and Medicare which is approximately 15%). Rather, self-employment is only taxed on the portion classified as a "reasonable salary". LLCs and sole-proprietorships must pay self-employment tax on all income. The ability to minimize self-employment tax is deemed to be one of the greatest benefits of a s-corporation.
3. Corporate Losses: losses in the corporation can be deducted from the individual tax returns of the shareholder thereby allowing them to offset other sources of income such as their W-2 income.
4. Franchise Tax: Franchise Tax is waived your first year. LLC on the other hand, must pay franchise tax its first year. S-Corp must pay the CA Franchise Tax board either a 1.5% tax on net CA income or $800, whichever is greater.
5. Distribution of Profits and Losses: No special allocation of profit and losses for shareholders. Corporate profits and losses must be split up proportionately to the percentage of shares owned by each shareholder. LLC’s on the otherhand allow for flexibility as to how they split their profits and losses.
C. Formalities
1. Must file an S-Corporation annual income tax return each year (IRS Form 1120S)
2. Must file annual report with Secretary of State, and a reporting fee of $25 and a statement of information are required 90 days after formation.
3. Must maintain corporate formalities such as: Drafting Bylaws, Minutes, Annual Meetings, issuance of stock, to keep a paper a trail of financial dealings between the corporation and its shareholders, and to avoid “piercing of the corporate veil.”
D. Other Characteristics
1. No more than 100 shareholders
2. Shar
The urban market is unique in the sense that the customer base buys out of a sense of popular appeal, as opposed to practical considerations.While the business attire market buys based on practical considerations such as corporate dress codes and client interactions, the urban market buys based on other criteria.Customers buying urban clothing will opt for extra large sized clothing, even if their regular size is smaller.To maximize your urban wear sales you need to use these urban fashion tips.Urban Fashion Tip #1Concentrate on large sizes.Large sizes sell well because the style is
I. S-Corporation
A. Liability
1. Shareholders granted personal protection from debts and liabilities of business (like c-corp and LLC)
B. Taxation
1. Pass through: Profits and losses pass through the corp and reported to the individual tax return of shareholder (same as partnership and LLC)
2. Self-Employment Tax Break: Profits of the S-Corp which pass through to the shareholders are not subject to self-employment tax (Social Security and Medicare which is approximately 15%). Rather, self-employment is only taxed on the portion classified as a "reasonable salary". LLCs and sole-proprietorships must pay self-employment tax on all income. The ability to minimize self-employment tax is deemed to be one of the greatest benefits of a s-corporation.
3. Corporate Losses: losses in the corporation can be deducted from the individual tax returns of the shareholder thereby allowing them to offset other sources of income such as their W-2 income.
4. Franchise Tax: Franchise Tax is waived your first year. LLC on the other hand, must pay franchise tax its first year. S-Corp must pay the CA Franchise Tax board either a 1.5% tax on net CA income or $800, whichever is greater.
5. Distribution of Profits and Losses: No special allocation of profit and losses for shareholders. Corporate profits and losses must be split up proportionately to the percentage of shares owned by each shareholder. LLC’s on the otherhand allow for flexibility as to how they split their profits and losses.
C. Formalities
1. Must file an S-Corporation annual income tax return each year (IRS Form 1120S)
2. Must file annual report with Secretary of State, and a reporting fee of $25 and a statement of information are required 90 days after formation.
3. Must maintain corporate formalities such as: Drafting Bylaws, Minutes, Annual Meetings, issuance of stock, to keep a paper a trail of financial dealings between the corporation and its shareholders, and to avoid “piercing of the corporate veil.”
D. Other Characteristics
1. No more than 100 shareholders
2. Shar
A home typing service is an ideal venture to get into on a part-time basis. While it won’t make you a millionaire, you can expect a few hundred dollars per month. I’m sure you could use that. However, if you are fast and good at it, you will find plenty of business coming your way from referrals and recommendations and your monthly income could very well skyrocket, making it a great home business idea.There are thousands of typing possibilities and even more people looking for the services of a typing agency. Typing requests will come from business people, doctors, lawyers, authors, students and even job seekers. Some poss
3. Corporate Losses: losses in the corporation can be deducted from the individual tax returns of the shareholder thereby allowing them to offset other sources of income such as their W-2 income.
4. Franchise Tax: Franchise Tax is waived your first year. LLC on the other hand, must pay franchise tax its first year. S-Corp must pay the CA Franchise Tax board either a 1.5% tax on net CA income or $800, whichever is greater.
5. Distribution of Profits and Losses: No special allocation of profit and losses for shareholders. Corporate profits and losses must be split up proportionately to the percentage of shares owned by each shareholder. LLC’s on the otherhand allow for flexibility as to how they split their profits and losses.
C. Formalities
1. Must file an S-Corporation annual income tax return each year (IRS Form 1120S)
2. Must file annual report with Secretary of State, and a reporting fee of $25 and a statement of information are required 90 days after formation.
3. Must maintain corporate formalities such as: Drafting Bylaws, Minutes, Annual Meetings, issuance of stock, to keep a paper a trail of financial dealings between the corporation and its shareholders, and to avoid “piercing of the corporate veil.”
D. Other Characteristics
1. No more than 100 shareholders
2. Shar
While training and observing groups as a corporate trainer and team builder over the past few years, I am always amazed at how a group of strangers gel and become a team in a matter of hours. Groups on teambuilding retreats can become closer to each other in one day than some people do in years of working with each other in offices. The major reason I attribute the success of these groups to and the way they gel is the use of “fun”.Plato said ”you can learn more about a person in an hour of play than in a year of conversation.” Fun is also a great way to increase employee retention, sales, motivate and inspire your emplo
5. Distribution of Profits and Losses: No special allocation of profit and losses for shareholders. Corporate profits and losses must be split up proportionately to the percentage of shares owned by each shareholder. LLC’s on the otherhand allow for flexibility as to how they split their profits and losses.
C. Formalities
1. Must file an S-Corporation annual income tax return each year (IRS Form 1120S)
2. Must file annual report with Secretary of State, and a reporting fee of $25 and a statement of information are required 90 days after formation.
3. Must maintain corporate formalities such as: Drafting Bylaws, Minutes, Annual Meetings, issuance of stock, to keep a paper a trail of financial dealings between the corporation and its shareholders, and to avoid “piercing of the corporate veil.”
D. Other Characteristics
1. No more than 100 shareholders
2. Shar
The chief advantage of being a member of a cash back portal is of course the cash back deals you get upon every purchase. A cash back portal, however, can not be chosen as the favourite solely on the basis of the cash back it offers. There are other factors to consider as well. Some of the other benefits you should look for are:Number of retailers listed:The greater the numbers of retailers listed on a cash back site, the greater are the chances of finding all your favourite products on it. Before you choose your favourite cash back site, therefore, check how many retailers are actually listed on it.
2. Must file annual report with Secretary of State, and a reporting fee of $25 and a statement of information are required 90 days after formation.
3. Must maintain corporate formalities such as: Drafting Bylaws, Minutes, Annual Meetings, issuance of stock, to keep a paper a trail of financial dealings between the corporation and its shareholders, and to avoid “piercing of the corporate veil.”
D. Other Characteristics
1. No more than 100 shareholders
2. Shareholders must be US citizens or have US residency status
3. Shareholders must be individuals (not corporations or partnerships)
4. Only one class of stock (but different voting rights permitted, and same rights to participate in dividends and sale of assets)
5. Owners are called “shareholders”
II. LLC
A. Liability: shareholders granted personal protection from debts and liabilities of business (like s and c-corp)
B. Taxation
1. Pass through: Profits and losses pass through the LLC and reported to the individual tax return of shareholder (same as partnership and Corps)
2. Self-Employment Tax: LLC members must pay self-employment tax on all income from the LLC.
3. LLC Losses: losses in the LLC can be deducted from the individual tax returns of the member thereby allowing them to offset other sources of income such as their W-2 income.
4. Franchise Tax: Must pay first year minimum annual tax of $800, and is due 75 days after formation and every year thereafter. Annual franchise tax is greater if total reported income is greater than $250,000. See http://www.ftb.ca.gov/forms/06_forms/06_3522.pdf.
5. Distribution of Profits and Losses: It is flexible since an LLC allows you to decide what share of the LLC profits and losses each owner will receive.
C. Formalities
1. Very little formalities required. Operating agreement is recommended, annual meetings not required.
2. A reporting fee of $25 and a statement of information are required 90 days after formation and then every two years.
D. Other Characteristics
1. Licensed professional in California must form a Professional Corporation instead.
2. Owners are called “members”
3. Members may be individuals or separate legal entity such as a corporation.
4. Member’s investment receives a percentage ownership interest in return.
Percentage ownership determines how profit and losses are split up.
© 2006 Michael N. Cohen, Esq. This article is not intended as a substitute for legal advice. The specific facts that apply to your matter may mak
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