1. Business Nuts & Bolts: Do it right so you don’t get burned
Business Nuts & Bolts: Do it right so you don’t get burned Business structure & Taxation
Presented By:
Maria Hampton, Esq.
Kristin A. Roberts, EA, ABD The Roberts Tax Group, Inc.

2. Structures to discuss Sole Proprietorship Partnership
Limited Liability Company
S-Corporations
C-Corporations

3. Sole Proprietorship Legal No difference between you and your business
You are entitled to all profits and are responsible for all business debt – unlimited personal liability
Quick and cheap to form
You have complete control over business
Taxation
You pay both portions of Social Security & Medicare = 15.3%
Often required to pay estimated taxes
Business & Personal taxes are not separate
Hard to raise money
Sole Proprietorship

4. Partnership Legal Two or more people Several Types
General, Limited and Joint Venture
Share ownership, profits and loss
Quick & inexpensive to form
Lack of complete control
Liable for debt incurred by other partner(s)
Disputes are common
Taxation
Business must file separate informational return
You pay both portions of Social Security & Medicare = 15.3%
Often required to pay estimated taxes
Hard to raise money
Partnership

5. Limited Liability Company
Legal
Mix between corporation and partnership
Quick & inexpensive to form
Limited liability to members
Taxation
Business may be required file separate informational return
Options to tax as other business entities
You pay both portions of Social Security & Medicare = 15.3%
Often required to pay estimated taxes
Easier to raise money
Fewer restrictions on sharing profits
Limited Liability Company

6. S-Corporation Legal Stricter operational processes
More complex and costly to set up
Limited liability to shareholders
Taxation
Shareholder compensation required
No foreign ownership – less than 100 shareholders
Profit/Loss pass through to Shareholders
Can be a great source for tax savings compared to other structures
Must first organize as C-Corp, then make S-election with IRS
S-Corporation

7. C-Corporation Legal Separate legal entity from owners
More complex and costly to set up
Issues stocks
Taxation
Corporation is taxed on earnings
Double taxation on dividends
Less flexibility in accounting/tax matters
Easier to generate capital
C-Corporation