LEGAL AND TAX ISSUES FOR SMALL BUSINESS
LEGAL AND TAX ISSUES FOR SMALL BUSINESS
How to organize?
• Sole proprietor
• Partnership
• C corporation
• S corporation
• Limited liability company (LLC)
Sole proprietor-advantages
• Simple to start
• Nominal fees
• Minimum government interference
• Owner is boss
• Profits not shared (nor are losses)
Sole proprietor-disadvantages
• Terminates with death of owner
• Difficult to raise capital
• Needs diversified talent
• Unlimited liability-personal assets at risk!
• High failure rate
Partnership-advantages
• Not very difficult to form
• A method of raising capital
• Partners are equal boss (bosses)
• Abilities are complemented
Partnership-disadvantages
• People problems
• High legal fees-partnership agreement
• Authority of partners needs definition
• Unlimited joint and several liability
• Difficult to dissolve
• Terminates with death of any partner
• Profits shared
C corporation-advantages
• A way of raising capital (sale of stock)
• Easy ownership transfer
• Limited liability
• Continues until terminated
• Possible tax advantages-benefits available to owners
C corporation-Disadvantages
• Incorporation costs
• Charter restrictions
• Report and record keeping
• Income tax
• Double taxation (at company and shareholders’ levels)
S corporation and LLC’s-advantages
• Eliminate double income taxation-income taxed only at shareholder level
• Limited liability
• Continues until terminated
• Taxed like a partnership
• Losses can reduce tax from other sources
S corporation and LLC’s-disadvantages
• Need to follow corporate formalities
• Profits taxed annually
• Business must incorporate
• Individual rates vs. corporate rates
Protecting limited liability
• What’s in a name? (use LLC, Inc., LTD, to indicate nature of organization)
• Let people know! (advertising, signs, business cards, invoices)
If you don’t let people know, liability protection will be lost!
Federal income tax
• Sole proprietor (and sole member LLC)
Schedule C to form 1040
Self employment tax (form SE)
• Partnership
Business files form K-1, 1099 to partners for profit or loss
• C corporation
Business files and pays income tax, owners taxed for dividends
• S corporation & LLC
Taxed like partnership
Wisconsin taxes
• Income taxes on all types of business
• Unemployment tax
• Sales tax
Use Business Wizard on State of Wisconsin home page.
Other federal taxes
• Unemployment tax
• Payroll taxes
Get small business tax kit.
Presented by: Attorney Jonathon A Olson
108 Packerland Drive, Suite D
Green Bay, WI 54303
(920) 569-2529
E-mail attyjolson@
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related searches
- software for small business management
- best crm for small business 2019
- financing for small business customers
- best email service for small business mar
- best email service for small business marketing
- government grants for small business start up
- best email service for small business mark
- gmail for small business free
- ideas for small business advertising
- government loans for small business star
- template for small business plan
- grants for small business startup