Are you contemplating starting a new business? Do you currently own a business that is a sole proprietorship or partnership? Have you considered the benefits of forming a corporation or limited liability company to protect your personal assets from your business’ liabilities?
The Law Office of Carolyn Christoffersen assists each business owner who wants the protections offered under state statutes by setting up a corporation or limited liability company. Carolyn also helps identify potential events that could be detrimental to the business, and she assists in putting a plan in place to address such events should they ever arise.
Below is a chart describing each of the differences in the legal entities we can assist you in forming:
|Entities Characteristics||LLC Limited Liability Company||C Corporation||S Corporation|
|Ownership Rules||Unlimited number of members allowed||Unlimited number of shareholders; no limit on stock classes||Up to 100 shareholders; only one class of stock allowed|
|Personal Liability of the Owners||Generally no personal liability of the members||Generally no personal liability of the shareholders||Generally no personal liability of the shareholders|
|Tax Treatment||The entity is not taxed (unless chosen to be taxed); profits and losses are passed through to the members||Corporation taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends||With the filing of IRS Form 2553, a C Corporation becomes a S Corporation, where the profits and losses are passed through to the shareholders|
|Key Documents Needed for Formation||Articles of Organization / Certificate of Formation; Operating Agreement||Articles of Incorporation; Bylaws; Organizational Board Resolutions; Stock Certificates; Stock Ledger||Articles of Incorporation; Bylaws; Organizational Board Resolutions; Stock Certificates; Stock Ledger; IRS & State S Corporation election|
|Management of the Business||The Operating Agreement sets forth how the business is to be managed; a Member (owner) or Manager can be designated to manage the business||Board of Directors has overall management responsibility; Officers have day-to-day responsibility||Board of Directors has overall management responsibility; Officers have day-to-day responsibility|
|Capital Contributions||The members typically contribute money or services to the LLC and receive an interest in profits and losses||Shareholders typically purchase stock in the corporation, either common or preferred||Shareholders typically purchase stock in the corporation, but only one class of stock is allowed|
Carolyn recognizes that small businesses fuel our economy, and she endeavors to make the formation processes efficient and effortless for the business owner.