sba guid to corporate structures

sba guid to corporate structures - U.S Small Business...

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U.S. Small Business Administration MP-25 SELECTING THE LEGAL STRUCTURE FOR YOUR BUSINESS Jocelyn West Brittin McGuire, Woods, Battle & Boothe McLean, Virginia Management and Planning Series ____________________________________________________________________________________________ This publication is protected under copyright. No part may be reproduced, transmitted or transcribed without the permission of the author. SBA retains an irrevocable, worldwide, nonexclusive, royalty-free, unlimited license to use this copyrighted material. While we consider the contents of this publication to be of general merit, its sponsorship by the U.S. Small Business Administration does not necessarily constitute an endorsement of the views and opinions of the authors or the products and services of the companies with which they are affiliated. All SBA programs and services are extended to the public on a nondiscriminatory basis. ____________________________________________________________________________________________ TABLE OF CONTENTS INTRODUCTION SOLE PROPRIETORSHIP Getting Started Control Liability Continuity and Transferability Taxes Pros and Cons PARTNERSHIPS Getting Started Control Liability Continuity and Transferability Taxes Pros and Cons CORPORATIONS Getting Started Control
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Liability Continuity and Transferability Taxes Pros and Cons SUMMARY APPENDIX: INFORMATION RESOURCES ____________________________________________________________________________________________ INTRODUCTION In starting a small business, one of the first questions you should ask is what form of legal entity you should use or "How should I organize my business?" Also, as your business grows and changes, you should from time to time ask yourself whether the entity you have chosen remains the best form of organization for your business.The entities most commonly used by small businesses in the United States are (1) the sole proprietorship, (2) partnerships and (3) stock corporations. In discussing these entities, this publication answers the following questions: ! Getting started -- How is each type of legal organization set up? ! Control -- Who owns and who controls the business? ! Liability -- Who is responsible if the business fails or has losses? ! Continuity and transferability -- How long does each type of organization last, and how does the owner sell the business? ! Taxes 1 -- How are the profits and losses of the business taxed?Also included is a summary of the pros and cons of the different legal entities and a table (Table 1) comparing a number of factors to consider when you select one of them for your business. -------------------- 1 This publication discusses basic federal income tax principles as they exist in 1991. Tax laws are frequently changed. For a detailed examination of federal taxes as they apply to small businesses consult the following Internal Revenue Service publications: Tax Guide for Small business, Pub. No. 334; Tax Information on Partnerships, Pub. No. 541; Tax Information on
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This note was uploaded on 10/05/2010 for the course ARTM 360 taught by Professor Wentworth during the Spring '09 term at CofC.

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sba guid to corporate structures - U.S Small Business...

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