Small Business

Generally, it is not the type of business that matters, but the credit worthiness of the guarantors, the financial performance of the business and the collateral pledged. The real issue is that often service based businesses have very few hard assets such as inventory, equipment or accounts receivable to pledge as collateral, but banks and the Small Business administration require some form of collateral. Business owners often pledge personal assets to obtain a loan.

Your personal credit history is considered for a business loan because it gives the lender or bank a history of your personal money management, demonstrates repayment of debts and it lets the lender know of existing debts including delinquencies, bankruptcies, references, liens, student loans, etc. It is also important because if your business is a sole proprietorship or individual, there in no difference in credit history for loan purposes. Generally, if you business is a corporation, LLC, partnership, trade company, etc., then the bank or lender looks at the business history.

Your personal credit history is considered for a business loan because it gives the lender or bank a history of your personal money management, demonstrates repayment of debts and it lets the lender know of existing debts including delinquencies, bankruptcies, references, liens, student loans, etc. It is also important because if your business is a sole proprietorship or individual, there in no difference in credit history for loan purposes. Generally, if you business is a corporation, LLC, partnership, trade company, etc., then the bank or lender looks at the business history.

Incorporation can provide many benefits. The most important factor is that incorporation can help limit your personal liability as a business owner.
Generally, creditors of your corporation must satisfy their claims by seizing the assets of the corporation rather than your personal assets.
In contrast to a sole proprietor or partner in a partnership, you are financially responsible for all liabilities of the business, and your personal assets are subject to seizure or lien by creditors.
Other benefits of incorporation can include greater tax deductions for health insurance and medical expenses, lower payments for Social Security tax and Medicare tax, and greater opportunity to raise capital for the business through the issuance of stock.

A limited liability corporation offers limited liability to its owners, but may elect to be taxed as a partnership which passes all the income and losses through to its owners. A C corporation is taxed at the federal level and profits are either retained by the corporation or distributed to the shareholders. A profit distribution is called issuing a dividend. These profits are then taxed as income in the shareholders personal taxes. Witha LLC, the owner has options of how to be taxed. Ithe IRS allows 3 choices. A Corporation tax like a general C corporation, Partnership taxation like a S corporation or

A close corporation is also known as a closely held corporation. It is a corporation in which the stock of the corporation cannot be traded on a public exchange such as the NYSE, NASDAQ, etc. and the number of shareholders must be specified, and typically cannot exceed 35 and certain limitations may be placed on the transfer of stock. A close corporation can be advantageous for small businesses.

There is no limit, and it is not illegal to bring in or take out any amount of money or monetary instruments from or to the United States. Examples of monetary instruments include U.S. or foreign coin in current circulation, travelers checks, currency, money orders and negotiable instruments or investment securities in bearer form. However, if you take out or bring in more than $10,000 you must file IRS Form 4790, the Report of International Transportation of Currency or Monetary Instruments with US Customs. Failure to comply can result in criminal, civil forfeiture penalties.

W-2 forms should be furnished to your employees by January 31. It is your responsibility as an employer to file Forms W-2 with the Social Security Administration (SSA) for your employees which will show the wages paid and taxes withheld for the year. You must send Copy A to the SSA with Form W-3 by February 28. Form W-3 is a summary form that shows the total of all W-2's being sent. Go to the IRS website or get Publication 15, Circular E, Employer's Tax Guide or Forms and publications can be requested by calling 1-800-829-3676.

The dues you pay the stock exchange as a securities dealer are deductible as a miscellaneous itemized deduction on IRS Schedule A subject to the 2% limitation.