Starting A Business (2 - 3)



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Summary:
Starting a Business - (2 - 3)

When we last met, I went over some of the need for
licenses and permits, as well as how to locate
which one are right for you.

You may already have a plan and the form of your
business entity set and if you do great, if not,
I'd like to share a few things with you.

Form of Entity?

All offer advantageous to you when you start a
business, however there are disadvantageous too.

- Sole proprietorships are the most simple
for a business owner.

A sole proprietor does not have to file a
separate business tax return.

A Schedule C is attached to your 1040 and
filed with the IRS.

Gains and losses from the business are
simply combined with other personal
taxable items,

Disadvantages include having personal
liability and lack of investment
flexibility.

If you need cash you need to personally
have it in the bank, or you can borrow it
from the bank.

- Partnerships are similar to sole
proprietorships, in that the formation is
generally easy, however, you would be wise
to use an attorney.

Also the taxes are simply passed through
to the individuals personal tax returns.

The disadvantages are the same as being a
sole proprietor, personal liability and
lack of investment flexibility.

- Limited Liability Corporations (LLC
Article:
Starting a proprietorship - (2 - 3)

When we last met, I went over some of the need for
licenses and permits, as well as how to locate
which one are right for you.

You may still have a plan and the form of your
business entity set and if you do great, if not,
I'd like to share a few things with you.

Form of Entity?

All offer timely to you when you start a
business, however there are disadvantageous too.

- Sole proprietorships are the most simple
for a career building owner.

A sole proprietor does not have to file a
separate affair tax return.

A Schedule C is close to your 1040 and
filed with the IRS.

Gains and losses from the militancy are
simply mingled with other personal
taxable items,

Disadvantages include having personal
liability and lack of investment
flexibility.

If you need cash you need to personally
have it in the bank, or you can nip it
from the bank.

- Partnerships are similar to sole
proprietorships, in that the formation is
generally easy, however, you would be wise
to use an attorney.

Also the taxes are simply passed through
to the individuals personal tax returns.

The disadvantages are the same as genetic individual a
sole proprietor, personal liability and
lack of investment flexibility.

- Limited Liability Corporations (LLC’s)
do much compulsive gambler in limiting your liability,
as the name implies.

Disadvantages include the costs of setting
up.

Federal limits on who and what are able to
be LLC’s and the tax implications both
federal and state.

- Corporations offer the most personal and
asset protection and have the greatest
flexibility of any activeness entity.

Corporations vary in their structure and
organization.

A corporation is not just a corporation.

You will need to select from various
types.

The two typical corporations that most
CPA's or attorneys will recommend are
S and C corporations.

You should keep in mind that every state
has different laws for corporations.

What an lawyer may tell someone in
California may not be true in Florida.

S Corporation:
- Allows for limited
liability of the
owners/officers/directors.

-Typically runs on a
pocket notebook year.

- Full disclosure of
corporate owners.

- Profits pass through to
the individual tax
return 1040. No tax
brackets separate from the
personal tax brackets
apply.

- All profits are taxed
even if not distributed.

- State taxes will apply
for individuals who are
located in a state with an
individual state tax.

C Corporation
- Allows for limited
liability of the
owners/officers/directors.

- Runs on a fiscal year,
which may be designated
by the board and room of directors,
rather than on a calendar
year
.
- Nevada requires no
disclosure of corporate
owners.

- Profits are taxed at
corporate rates on an 1120
return separate from the
individual return.

- Profits can be kept as
retained earnings.

When this first approach resumes, I'll go over the
accounting and taxation needs of a business. Look
forward to seeing you then.

This computer printout on STARTING A BUSINESS? is not
'professionally' guidance you on must matters,
or hammy acting agreements. If you have any concerns
in regards to your business, I would advise
consulting an attorney.

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Irvine, CA 92606



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