Business Formation

A limited liability company, like a corporation, is set up and created under state law. Its owners are referred to as members. The entity gives its members the best of both worlds - Corporate liability protection with the advantages of partnership taxation. Forming a limited liability company is more expensive than forming a corporation and may not be necessary for your situation. Speak to your local CPA in detail to determine if forming or changing your entity status to a limited liability company is the correct choice for you.

Some advantages are: it has minimum legal restrictions; and is easy to discontinue. Some disadvantages are: unlimited liability; your income tax cannot be deferred by retaining profits; and you may not bring in new owners or outside capital contributions. Speak to your local CPA to determine the best entity choice for your needs.

Some advantages are: there is limited liability; and the entity avoids double taxation of profits as is the case with C Corporations.
The profits that are passed through to the shareholders are not subject to SE tax as in a partnership.
Some disadvantages are: that the shareholders pay tax on earnings even if they are undistributed; the contributions limits to a qualified retirement plan are based on shareholder/employee wages, not the overall profits as with a Sole Proprietorship.

An advantage is that it is a way to combine the financial abilities and skills of several different people. Some disadvantages are that the general partners are liable for the actions of the other partners and a partnership is not that easy to get out of. Speak to your local CPA about selecting the best entity for your purposes.

Some advantages are that it avoids certain S corporation restrictions. It also avoids double taxation of profits.
Some disadvantages are that it is currently considered a relatively new business entity with little case law or regulatory law currently available.
There is inconsistent treatment from state to state. The entity must have at least 2 owners.
Speak to your local CPA about determining the best entity choice to fit your needs

Yes. If you use a car entirely for business the cost of leasing is deductible. You cannot depreciate a car you lease. You can choose to deduct the standard mileage rate in lieu of actual expenses including lease payments.

Yes. The IRS has developed a web site to help small business and self-employed persons at www.irs.gov/businesses/small/index.html.

Most jurisdictions require that the corporation designate a registered agent for Service of Process. Generally, anyone who has a street address within the state of incorporation may act as a registered agent for the corporation. PO Boxes are not allowed to be used for a registered Agent. Most tax notices are sent to the Registered agent.

Most jurisdictions allow the same person to act in different capacities. Generally, There are up to 6 officers. President, Vice President, Treasurer, Secretary or clerk, Assistant Secretary, Assistant Treasurer.
Although most jurisdictions allow one person to serve in all capacities, the person's responsibility and authority changes through the different officer ships the person assumes.
The President is typically responsible for entering into contracts on behalf of the corporation, the Treasurer is responsible for maintaining and accounting for corporate funds, and the Secretary is responsible for observing corporate formalities and maintaining corporate records. In addition to these required officer positions, a corporation may also have vice presidents and assistant secretaries or assistant treasurers.
Generally, the authority and responsibilities of each officer is described in the corporate bylaws and may be further defined by an employment contract or job description.
The President has the overall executive responsibility for the management of the corporation and is directly responsible for carrying out the orders of the board of directors. He or she is usually elected by the board of directors.
The Treasurer is the chief financial officer of the corporation and is responsible for controlling and recording its finances and maintaining corporate bank accounts.
Actual fiscal policy of the corporation may rest with the Board of Directors and be largely controlled by the president on a day to day basis. The Secretary is typically responsible for maintaining the corporate records.