Partnership, LLC or Incorporate?

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How are you registered?

  • Sole-Proprietor or Partnership

    Votes: 17 100.0%

  • LLC (Limited Libility Corporation)

    Votes: 0 0.0%

  • Incorporated

    Votes: 0 0.0%

  • Not legally registered at all

    Votes: 0 0.0%
  • Total voters
    17
A

atomicfission92

New DJ
Nov 9, 2009
1,027
1
My partner and I are going to register our business in the beginning of next year. But we can't figure out if we should register it locally as a partnership, or if we should register on a state level as a LLC or a Corporation. We are going to try and find some legal advise but we wanted to know what you guys are mostly registered under.

We are leaning more towards the LLC or Corporation because then it would be a separate entity from us both. And since we both have some student loans we are currently paying back we think it may be best going this route.
 
Here we make sure we get a registered business name and thats all thats needed

if you become a Pty Ltd then thats a lot more involved and I will not do that

too much work when you only own a few setups...
plus tax is a nightmare even with a registered busines name
 
S corp Here.. Taxes are done seperately under the corporation

c corp they are passed through to your personal taxes..same with a LLC.

Partnerships are very complicated..good luck..
 
BeermanMC said:
S corp Here.. Taxes are done seperately under the corporation

c corp they are passed through to your personal taxes..same with a LLC.

Partnerships are very complicated..good luck..
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That is what I was trying to figure out. What taxes go where. I was told that with an LLC you can be taxed as an S Corp. But if you register an S corp you have to pay corporate dues to the state. But with the LLC you don't need to.
 
BeermanMC said:
S corp Here.. Taxes are done seperately under the corporation

c corp they are passed through to your personal taxes..same with a LLC.
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That's backwards actually... S-Corp passes through.
 
How are you registered?
Sole-Proprietor or Partnership
LLC (Limited Libility Corporation)
Incorporated
Not legally registered at all

I am not sure what the aim is on the part of the OP, and what I say may not be the definitive information regarding this general topic. Please consult a qualified tax consultant and legal counsel before making any decisions regarding the legal structure of your business.

I believe, first of all, that LLC stands for Limited Liability Company NOT Limited Liability Corporation. I am pretty sure about this distinction if for other reason than the fact that a corporation, by definition, has limited liability.

A LLC can elect to file Federal Income Taxes as if it is a corporation. Only a competent Tax Accountant or Tax Attorney can advise you whether doing so would work best in your personal situation. If you are operating on your own, without the election to file as a corporation all of the business activity is included on your personal tax return, Form 1040 (along with the required forms and schedules).

If an LLC has more than one owner and does not elect to file as a corporation, the partnership would report its earning on Form 1065 and provide each partner with a Schedule K-1 to be included in his personal Form1040. However, with the protection from creditors provided by the LLC the partners are not personally liable for debts of the business while a partner in a "regular" partnership can be personally pursued by creditors!

A "C" corporation for Federal Income Taxes is a free-standing entity that pays taxes on any earnings directly to the IRS. Owners can extract wages and/or dividends from a corporation. Wages (reported via W2's) and dividends (reported via form 1099's) are income to the recipients, while the corporation can only deduct wages paid from its income statement in determining taxable income. The corporation CANNOT deduct dividends when reporting its income. So, in effect, the corporation pays taxes on any dividends paid out and so does the recipient - DOUBLE TAXATION!

An S-corp pays no taxes. The net income earned by the corporation is split among the owners and declared on Form K-1, which accompanies each owner's Form1040. As a corporation, the owners have not liability to creditors!
 
I am regietered with the state as a L.L.C., Limited Liability Corporation. Not company. I have set my LLC up to be taxed as an S-Corp., which is done through my personal taxes. I set my LLC up this way when I was in the bar business. When I sold the bar I changed the structure of my LLC. I do have a small amount of paperwork I have to file with the state every year, but my lawyer takes care of that. I go to his office, sign the papers and give him a check for $175, and it's done.

:sqwink::sqwink:
 
DJCC said:
I am regietered with the state as a L.L.C., Limited Liability Corporation. Not company. I have set my LLC up to be taxed as an S-Corp., which is done through my personal taxes. I set my LLC up this way when I was in the bar business. When I sold the bar I changed the structure of my LLC. I do have a small amount of paperwork I have to file with the state every year, but my lawyer takes care of that. I go to his office, sign the papers and give him a check for $175, and it's done.
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I can't comment on want any individual state has established or requires for registering a business and what local taxes/fees are levied. But regardless of what the state does, the business has to fall into one of the following categories for determining how taxes will be filed with the IRS. It's that clear; that simple:

Entities per the IRS: Sole Proprietor, Partnership, Limited Liability Company/Partnership (LLC/LLP), Corporation, Subchapter S Corporation

http://www.irs.gov/faqs/faq/0,,id=199631,00.html

Please also note that only a qualifying corporation can elect to be treated as an Subchapter S Corporation for federal tax purposes. The business, by definition, must be incorporated.

Please note that my response was to a generic question, considered from both the viewpoint of legal and IRS statutes. I wouldn't consider that anyone asking this type of question on a national forum expected an answer that addresses local statutes!

If a state has established an entity that they call a Limited Liability Corporation, being incorporated under that statue would be a factor in qualifying that business to elect Subchapter S status with the IRS.

Lastly, when a business has the word "Company" in their business name, or when that organization is referred to as a "Company" --- that word doesn't define the legal structure of how the company was organized!
 
ericlater said:
I can't comment on want any individual state has established or requires for registering a business and local taxes. But regardless of what the state does, the business has to fall into one of the following categories for filing taxes with the IRS. It's that clear; that simple:

Entities: Sole Proprietor, Partnership, Limited Liability Company/Partnership (LLC/LLP), Corporation, Subchapter S Corporation

http://www.irs.gov/faqs/faq/0,,id=199631,00.html
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Well then you can call my tax man and tell him he's been doing it wrong for 15+ years:sqwink::sqcool:
 
DJCC said:
Well then you can call my tax man and tell him he's been doing it wrong for 15+ years:sqwink::sqcool:
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I don't know where you attitude comes from, but perhaps IF YOU call you're "tax man" you'll actually learn what he IS doing? BTW, I don't presume that you disagree with the IRS, which doesn't recognize an entity dubbed "Limited Liability Corporation" as being a taxable entity? See my next post
 
I believe that following says it all.

http://www.irs.gov/businesses/small/article/0,,id=98277,00.html provides the following:
PER THE LINK PROVIDED:
Limited Liability Company (LLC)

A Limited Liability Company (LLC) is a business structure allowed by state statute. LLCs are popular because, similar to a corporation, owners have limited personal liability for the debts and actions of the LLC. Other features of LLCs are more like a partnership, providing management flexibility and the benefit of pass-through taxation.

Owners of an LLC are called members. Since most states do not restrict ownership, members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit “single member” LLCs, those having only one owner.

A few types of businesses generally cannot be LLCs, such as banks and insurance companies. Check your state’s requirements and the federal tax regulations for further information. There are special rules for foreign LLCs.
Classifications

The federal government does not recognize an LLC as a classification for federal tax purposes. An LLC business entity must file as a corporation, partnership or sole proprietorship tax return.

An LLC that is not automatically classified as a corporation can file Form 8832 to elect their business entity classification. A business with at least 2 members can choose to be classified as an association taxable as a corporation or a partnership, and a business entity with a single member can choose to be classified as either an association taxable as a corporation or disregarded as an entity separate from its owner, a “disregarded entity.” Form 8832 is also filed to change the LLC’s classification. THE END
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Please note that if on the Form8832 the LLC elects to be treated as a corporation, it can further elect Subchapter S status!

It's too bad that in trying to help the OP and others with the same question that I had to be sidetracked not by someone with questions, but rather by someone who has NO knowledge of what he speaks and wants to engage, it seems, in a debate? Because of that circumstance, I am done!

I hope my efforts helped those who were seeking FACTUAL info.
 
ericlater said:
I don't know where you attitude comes from, but perhaps IF YOU call you're "tax man" you'll actually learn what he IS doing? BTW, I don't presume that you disagree with the IRS, which doesn't recognize an entity dubbed "Limited Liability Corporation" as being a taxable entity? See my next post
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Well first off I did not have an attitude.:sqmad:

Now I do, You do not know me or my business so you, my friend, have no clue to how ME and MY bussiness is set up or being taxed.

I said that I am set under an LLC, BEING TAXED AS A S-CORP.

You can post all the links that you want too but until you go to your lawyer, in your state and get it set up. That, sir, IS FACT!:sqwink::sqconfused:


<<< Attitude off>>>
 
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