Forming an S-Corp

LLC‘s provide personal liability and asset protection. Members (owners) are not held personally liable for the debts of the company.

LLC‘s are not taxed at the Corporate level. The profits and losses pass through to the members to report with their personal income tax.

Although fees vary by state, LLC‘s are required to pay a filing fee along with the article of organization to set up an LLC.

LLC‘s can be Member-Managed or Manager-Managed. In a Member-Managed LLC the owners(s) of the company run the day to day activities of the LLC. In a Manager-Managed LLC the member(s) elect a manager(s) to run the day to day activates of the LLC.

LLC‘s have a very informal business structure. LLC‘s have become very popular to form for this reason. LLC‘s are not required to hold meetings, document minutes of meetings, issue stock or elect directors.

LLC‘s can be either perpetual or have a finite end date. The existence term of an LLC is usually documented in the operating agreement of the company. Some states require on the article of organization to list a termination date or list a perpetual existance. If perpetual, the company will continue to exist if the member(s) die or if member(s) interests are transferred.

Most states require LLC‘s to file an annual report or pay a franchise tax on a yearly or biennial basis. Some states do not require any filings.

Since LLC‘s do not have stock to issue they can not sell stock to raise capital. LLC‘s are a separate legal entity and can earn credit, they can also obtain bank loans to raise capital. LLC‘s can get capital from existing member(s) or take on additional member(s) if approved in their operating agreement.

C-Corps provide personal liability and asset protection. Officers, Directors, and Shareholders are not held personally liable for the debts of the company.

C-Corps are double taxed. The company is taxed at the corporate level and dividends distributed to share holders are taxed as well.

Although fees vary by state, C-Corps are required to pay a filing fee along with the articles of incorporation to set up an C-Corp.

C-Corps have shareholders, directors and officers. The shareholders are the owners of the company. The directors are elected by the shareholders and they appoint/elect officers to run the day to day activities of the business. People can hold multiple offices. A C-Corp can have one person who is the only shareholder, directors and officer.

C-Corps have a very formal structure. C-Corps are required to have bylaws, hold annual meetings, document minutes of meetings, issue stock and elect directors. Failure to comply with these formalities could cause the corporate veil to be pierced.

C-Corps are a separate legal entity and have a perpetual existence. The corporation survives death and the transferring of stock by the shareholders.

Most states require C-Corps to file a annual report or pay franchise taxes on a yearly or biennially timeline. These fees can range from $10-$1,000 depending on state guidelines Some states do not require any filings.

C-Corps can raise capital through selling various types of stock. Once someone purchases stock, they become a shareholder and business owner. Since C-Corps are a separate legal entity and can earn credit they can also obtain bank loans to raise capital.

S-Corps provide personal liability and asset protection. Officers, Directors and Shareholders are not held personally liable for the debts of the company.

S-Corps are not taxed at the Corporate level. The profits and losses pass through to the shareholders to report with their personal income tax.

Although fees vary by state, S-Corps are required to pay a filing fee along with the articles of incorporation to set up an S-Corp.

S-Corps have shareholders, directors and officers. The shareholders are the owners of the company. The directors are elected by the shareholders and they appoint/elect officers to run the day to day activities of the business. People can hold multiple offices. A S-Corp can have one person who is the only shareholder, director and officer.

S-Corps have a very formal structure. S-Corps are required to have bylaws, hold annual meetings, document minutes of meetings, issue stock and elect directors. Failure to comply with these formalities could cause the corporate veil to be pierced.

S-Corps are a separate legal entity and have a perpetual existence. The corporation survives death and the transferring of stock by the shareholders.

Most states require S-Corps to file a annual report or pay franchise taxes on a yearly or biennially timeline. These fees can range from $10-$1,000 depending on state guidelines. Only a handful of states do not have a annual or biennial filing requirement.

S-Corps can raise capital through selling various types of stock. Once someone purchases stock, they become a shareholder and business owner. Since S-Corps are a separate legal entity and can earn credit they can also obtain bank loans to raise capital.

Owners have no personal liability or asset protection. Owners are held personally liable for the debts of the company.

DBAs are not taxed at the corporate level. Profits and losses are reported by the owner/owners with their personal income taxes.

Most DBA filings are done at the county level and do not require a state formation fee. Some states do require a state level registration and filing fee.

DBA owner/owners run ALL day to day activates of the company and have no restrictions within their role.

No corporate formalities are required.

A DBA ends with the death of the owner(s) or upon closing the business.

No ongoing maintenance or yearly filing requirements.

Capital is generally raised through bank loans since DBAs can not issue stock.