In case you are thinking of starting a business or upgrading the one you have, it is always difficult to decide on the kind of entity that you can use. The entity that you settle on will always have major impacts on your trends of paying for your taxes as well as ensuring that your assets are protected. Some of the possible entities to use are highlighted here.
First, you can make use of an S corporation which has already been elected and it can be taxed like an entity that flows through. With the S corporation, you as a stakeholder in a business you are just taxed once and it will be at a level that is very personal. Once you have been taxed at the level of individuals, you do not expect to be taxed for the second time at the level of corporate if you are using the S corporation. Since there is no instance that you will be taxed twice when you are using the S corporation, you will receive your federal income in whole without any form of taxation. Most business owners prefer this entity since they do not suffer double taxation at any given point. When using this type of entity, you must ensure that you are not more than hundred members as that is the maximum number.
The C corporation is yet another important entity that you can use so as to start your business strongly or to change the existing one in a very effective manner but you ought to remember that is pinned to double taxation. Here, your federal income will be always taxed just at the level that is corporate. This type of entity has not gained popularity among business owners as it requires one to be taxed more than just once like all other entities.
There is also the last entity that you can use when you want to start a business or change the one you have and this is the limited liability companies. Like any other entity that is a flow through, the limited liability companies is an entity that is elected to taxation. It has no restriction for membership or ownership like it is the case in S Corporate. You can be as many members as possible as long as you get to attain your goals.
For you to come up with any corporation, you will need to start by filling that given document that will help in the creation of a legal entity that is independent. Identifying the kind of taxation then finding a brand name that is unique for the company and in a clear and precise manner is wash you ought to do here.