Choosing a corporate structure

You’re right, sole proprietorships are easy.  With our businesses, we first started out with sole proprietorships.  As time passed, we realized we wanted more protection, and now have a S Corp and an LLC.  I studied the advantages and disadvantages of all types of structures, discussed it with our accountant and attorney,and these work the best for us. 

I think it’s important for any individual, who’s thinking of starting a business to self educate, and to also talk to trusted professionals before spending money on what could be the wrong entity for their business.

Thank you, Barbara, for insights from your experience. I agree it is very important for anyone to do a good due diligence on this matter. I am finding often the hidden implication of the original structure on the business. Every business seems to have its unique circumstances.

LLC’s are the way to go in California at least for companies like ours - cheapestees.com

Much less red tape than Corps. all the way around.

I agree, that is also the case in Washington State. It is so easy to set LLC up as well, and there’s no complex governance issue needed.

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An additional point to consider is the closure of an unsuccessful business. Unfortunately not all new businesses make it past the first year. As a sole proprietor you can simply stop doing business, deal with you own personal finances and pay the tax. As a limited liability company you have to close the company and prepare final accounts. For this reason many new businesses start as a sole trader before forming a company.

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Supreme court of India in case of TCS has ruled that canned software is goods and can be liable to sales tax- now VAT. However, most of the software makers are not paying VAt.even otherwise. in case of export; there is no tax. As far as direct tax is concerned exemption from export is governed under 80 HHC of Income Tax Act which is applicable to Indian Companies

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How can I set up my corporate structure?
I am looking for sample corporate structure layouts that make sense for a 15 employee operation.

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I would work at a laundromat first....then you can ask about going in on the business...or you can take out a small business loan and either rent or buy a piece of commercial property...and then go from there..the bank will walk you through it..

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Generally, sole proprietorships are not the way to go. You have unlimited liability. In some cases, that liability can be insured against and reasonable people could decide that the insurance costs and coverage is a better deal than the taxes associated with another entity.

Corporate statutes typically empower corporations to own property, ... Another advantage is that the assets and structure

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I have heard Sole Proprietorships were not a good way to go because of the liability. That’s why I set up an LLC myself. It seemed easier than the rigmarole of a C Corp but more protective than a SP. Are SP’s really not good? I do small business internet marketing and I’m sure this would be important info to pass on to my clients.

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I think it would have been helpful to discuss the benefits of electing to classify your C Corp as an S Corporation.  Although most of the same regulations and management duties are required of S Corps, the tax benefits are great!

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Anyone know what the best type of business model is for a network marketing company? I’m guessing most people go with sole proprietorships if they are sales reps right? Anyone?

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