BUSINESS STRUCTURES VIRGINIA ENTITIES - WHICH IS BEST FOR MY BUSINESS? MAY 22 2019

VIRGINIA BUSINESS ENTITIES SOLE PROPRIETORSHIP CORPORATION S CORPORATION LIMITED LIABILITY COMPANY PARTNERSHIP LIMITED LIABILITY PARTNERSHIP

SOLE PROPRIETORSHIP SIMPLEST AND LEAST EXPENSIVE BUSINESS STRUCTURE NO LIABILITY PROTECTION – INDIVIDUAL AND BUSINESS ARE THE SAME – PERSONALLY LIABLE FOR ALL BUSINESS DEBTS AND LIABILITIES ALMOST NEVER RECOMMENDED DUE TO LACK OF PROTECTION

CORPORATION KNOWN AS “C – CORPORATION” FORMED BY FILING ARTICLES OF INCORPORATION WITH THE STATE CORPORATION COMMISSION SUBJECT TO STRICT ORGANIZATIONAL AND OPERATING FORMALITIES STOCKHOLDERS, DIRECTORS AND OFFICERS LIABILITY PROTECTION SEPARATE LEGAL ENTITY FROM ITS STOCKHOLDERS TWO-TIERED TAXATION CAN BE MORE COSTLY THAN ALTERNATIVES

S - CORPORATION KNOWN AS “S – CORPS” FORMED BY FILING ARTICLES OF INCORPORATION WITH THE STATE CORPORATION COMMISSION – SAME AS C CORPORATION IN MOST RESPECTS “PASS THROUGH” TAXATION ELECTION UNDER SUBCHAPTER S INTERNAL REVENUE CODE STOCKHOLDERS, DIRECTORS AND OFFICERS LIABILITY PROTECTION SEPARATE LEGAL ENTITY FROM ITS STOCKHOLDERS

LIMITED LIABILITY COMPANY KNOWN AS “LLC” RELATIVELY RECENT ADDITION IN THE LEGAL WORLD MORE FLEXIBILITY THAN CORPORATIONS WITH SAME BENEFITS OWNERS ARE CALLED “MEMBERS” NO LIMITATIONS ON OWNERSHIP – FEWER FORMALITIES FORMED BY FILING ARTICLES OF ORGANIZATION WITH THE STATE CORPORATION COMMISSION SAME AS C CORPORATION IN MOST RESPECTS “PASS THROUGH” TAXATION SOME DIFFERENCES IN WITHHOLDING TAXES

CHOICE OF ENTITY TYPE FACTORS TO CONSIDER CHOOSING AN ENTITY TYPE IS A CRITICAL STEP WHEN SETTING UP A NEW BUSINESS. CARE MUST BE GIVEN THAT OWNER’S NEAR AND LONG TERM NEEDS ARE MET. FACTORS TO CONSIDER LIABILITY PROTECTION CONTROL TAX TREATMENT EASE OF FORMATION AND MAINTENANCE GOVERNANCE AND OPERATIONS

THANK YOU! Paul McCourt Curley 804-355-8273 paul.curley@sixeastlaw.com Phone 804-355-8273 Email paul.curley@sixeastlaw.com