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Different types of corporate
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Corporation Research Paper
Giancarlo Palermo
Mr. Plummer
Block: 5
8/28/14
Sub Chapter S A Subchapter S Corporation is a form of corporation that meets the IRS requirements to be taxed under Subchapter S of the Internal Revenue Code. The S corporation is more appealing to small-business owners than a standard corporation. That 's because an S corporation has certain tax benefits and provides business owners with the liability protection of a corporation. S corporations require scheduled director and shareholder meetings, minutes from those meetings, adoption and updates to by-laws, stock transfers and records maintenance.
A nice advantage to owning a S corporation is that it is limited liability which means that the owner/owners of the company
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An S corporation must follow the same formalities as a regular corporations. Certain fringe benefits are not available to it like this year you can only deduct 60% of health insurance with an S corporation; Regular corporations can deduct 100% of the premium. Regular corporations can deduct all of their disability insurance premiums; a S corporation can’t. Banks may charge more for checking accounts, loans, etc. The S corporation may more frequently require the services of a good attorney to help with the legal aspects of starting and operating the corporation which can be very …show more content…
Creditors cannot pursue the personal assets of the owners to pay business debts. In a sole proprietorship or general partnership, owners and the business are open to having their personal assets vulnerable. LLCs typically do not pay the same taxes as other businesses. LLCs are free to establish any organizational structure agreed upon by the company owners. LLCs can be managed by the owners or by managers, unlike corporations which have a board of directors who oversee the major business decisions of the company and officers who manage the day-to-day affairs. LLC’s also have few restrictions as to who can start one and own one. LLC’s have a distinct advantage over many other business structures for a couple of different reasons like; they are easy to setup, the restriction of personal liability of everyone associated, and they are not taxed as an entity. LLC shares are usually privately owned and not open to the
Corporation – “A business organization that exists as a legal entity and provides limited liability to its owners.” (Longenecker, Petty, Palich, Hoy, Pg. 205) The main advantage of a corporation is that the business liability falls onto this entity instead of the individuals that own it. The disadvantages of this organization are found mostly in its formation. A corporation is expensive to create and requires compliance with state
...s corporation, and it will probably go through many more transformations in the years to come.
Liability – The business has limited liability. The owners and shareholders are generally protected from most lawsuits.
There will be more tax deductions available to you after Forming an LLC. A few of these deductions include benefits like a retirement plan, medical expenses, business trips and client entertainment. The IRS audit rate for an LLC is much lower than that of a sole proprietor. You can own and be employed by an LLC at time same time, eliminating the self-employment return from your list of necessary tax documents.
All shareholders have limited liability. They are only liable for the amount they have put into the business. If a company closes down, shareholders can only lose the money they have invested. They will not be liable for anything else. Limited companies are owned by their shareholders.
The limited partner only risks what they invested in the business. The downside is if the limited partner becomes active then they could potentially lose personal assets. The S corporation is a more favorable tax option on income. The disadvantage is there is certain requirement that must be met. The LLC is a great option. With this type, the risk is only what is invested unlike sole proprietorship. It is easy to set up, and has tax advantages. The downside is if a corporation wanted to switch to C, it would have to pay additional taxes. I do believe the option they picked is best for them at that time. C has tax advantages. If they started with LLC and later wanted to change, it would cost them. C is a great way to get capital as well.
The benefits of a corporation The pierce corporate veil is exposing the shareholders to personal liabilities{RMBCA}. Brennan’s Inc. is a family owned restaurant that has family members as owners and shareholders. The court case involves a dispute with another family member. The corporation is the legal entity and it separates individuals who comprise; therefore, protecting the shareholders from personal liabilities. However, you can pierce the corporate veil:
Public limited companies have advantages that they can expand their organisations into different businesses and conglomerates. This protects the firm from dealing in one market. Ø The organisation can be on the stock exchange and this enables them to offer shares for sale publicly. Due to this PLC's can acquire ready capital for further development if they ar... ...
Below I have set out a table to show the Advantages and Disadvantages of a public limited company. ADVANTAGES DISADVANTAGES Shares offered for sale on the stock exchange, so that large amounts of capital can be generated. Shareholders protected by limited liabilit... ... middle of paper ... ...ibit the already efficient practices from continuing.
One tax issue that Limited Liability Companies possess, with respect to taxation, are issues involving self-employment taxes. An S corporation’s capacity to diminish and sometimes completely do away with self-employment taxes is one of the foremost causes for why an LLC will get passed up as the entity of choice. Self-emplo...
Discussion A Describe the difference between EMR and Clinical Information Systems (CIS). What are the advantages and disadvantages of CIS’s? EMR is an electronic record of patient health information that is created by each encounter in any healthcare setting (Menachemi & Collum, 2011). Information in the EMR includes patient progress notes, medications, problems, vital signs, immunizations, laboratory and radiology reports and past medical history (Menachemi & Collum, 2011).
The advantages in a ltd company are that you have limited liability and will only lose what you invested. You can raise the company’s capital since it can have up to 50 shareholders. However, growth might be limited to the small amount of shareholders and you need the agreement of other shareholders to sell your shares.
The capital structure of a firm is the way in which it decides to finance its operations from various funds, comprising debt, such as bonds and outstanding loans, and equity, including stock and retained earnings. In the long term, firms seek to find the optimal debt-equity ratio. This essay will explore the advantages and disadvantages of different capital structure mixes, and consider whether this has any relevance to firm value in theory and in reality.
Owning Your Own Business There are many advantages and disadvantages when owning your own business. When you own your own business, it’s known as a sole proprietorship. But with any type of business, there will always be advantages and disadvantages. Five advantages to owning your own business are: 1) The owner receives all profits, meaning that all earnings go to the sole proprietor, or the owner, and isn’t shared with anyone else.
The owner has the ability to grow or contact its operation at will with no need to consult with a boss or board of directors