Lecture_3_Business EntityAZ2008

Lecture_3_Business EntityAZ2008 - Thompson Law Group, P.C....

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Thompson Law Group, P.C. Attorneys at Law 2321 E. Speedway Blvd., Tucson, Arizona 85719-4730 Phone: (520) 882-5633; Fax: (520) 745-0616 E-MAIL: Lisa-LCTEsq@thompsonlawgroup.com Web Page: www.thompsonlawgroup.com BUSINESS ENTITY OVERVIEW I. CORPORATIONS: A. Generally Business and business owner : separate legal and tax entities Filing fees, incorporation fees and annual reports : required Limited Liability : owners have limited liability if the company is properly formed, adequately capitalized, and corporate formalities are followed; owners are, however, legally responsible for their own actions and any actions by other owners of which they have approved Life of business : unlimited Loan availability : banks more willing to loan capital Transferability of interests : the business may be set up so that shares or interest in the business may be easily transferred Corporate formalities : at minimum the shareholders and board of directors must hold a meeting once a year; annual report and $45 filing fee must be submitted to Arizona Corporation Commission B. “C” Corporations – taxed under subchapter “C” of the IRS code Number of owners : one or more Profits and losses : reported by the entity Taxes : the entity is taxed at the corporate level; the tax rate is higher than for most individuals (except for some personal service corporations) Operators are paid salaries and may avoid paying income tax on company profits by leaving profits in the company owner pays state and federal unemployment tax and FICA on salary paid to him/herself
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This note was uploaded on 08/25/2011 for the course CHE 113 taught by Professor Burrows during the Spring '11 term at ASU.

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Lecture_3_Business EntityAZ2008 - Thompson Law Group, P.C....

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