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Previously in this blog series, we discussed sole proprietorships, partnerships, LLCs, and Corporations, and areas to consider when deciding on a business structure (read our first post in this series for more detail regarding these areas). In this post we'll be discussing S corporations.
What is an S Corporation?
A Subchapter S (S Corporation or S Corp.) is a form of corporation that meets specific Internal Revenue Code 1361 requirements, giving a corporation with 100 shareholders or less the benefit of incorporation while being a pass-through entity. S corporations pass income directly to shareholders and avoid double taxation on the dividends of corporations, while still enjoying the advantages of the corporate structure.
This is the third blog post in our series on Types of Business Entities. In it, we'll be discussing the advantages and disadvantages of Limited Liability Companies (LLCs).
"A limited liability company (LLC) is a hybrid type of legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.
The "owners" of an LLC are referred to as "members." Depending on the state, the members can consist of a single individual (one owner), two or more individuals, corporations or other LLCs."
LLCs can have multiple members and exist and be taxed similar to a partnership with some corporation-like proponents. LLCs can also exist as single member LLCs which are similar to sole proprietorships. Furthermore, LLCs can file an S-corporation election, which will enable them to be taxed as an S-corporation while remaining a limited liability company.
This is our third post in our series on Types of Business Entities. In our first blog post of this series, we covered areas to consider when structuring a business. In this post we'll take a look at these areas again while discussing the advantages and disadvantages of partnerships.
"A partnership is a single business where two or more people share ownership. Each partner contributes to all aspects of the business, including money, property, labor or skill. In return, each partner shares in the profits and losses of the business."
There are three types of partnerships; General, Limited, and Joint Ventures. The definition above applies to General and Limited partnerships. The below definition applies to Joint Ventures.
This is our second post in our series on Types of Business Entities. In it, we'll be discussing the advantages and disadvantages of Sole Proprietorships.
Topics: Types of Business Entities