Limited liability companies (LLCs) have become the most common form of businesses. They provide the limited liability available to corporate shareholders while providing pass-through taxation, like a partnership. They do not have extremely formal requirements for recordkeeping.
S corporations, so named because they are taxed under Subchapter S of the Internal Revenue Code, is a hybrid entity like the LLC. However, S corporations have special restrictions: They may not have more than one class of stock, they are limited in their number of shareholders, all shareholders must be U.S. citizens or permanent residents, and the shareholders must be individuals, estates or trusts. S corporations offer pass-through taxation like LLCs.
Finally, C corporations are the traditional corporation, providing limited liability to shareholders and requiring a great deal of formal maintenance of documents. Unlike LLCs and S corporations, C corporations pay taxes twice on profits, once to the corporation and once to the shareholders. Despite this, their flexibility has kept them dominant as a type of formation and ownership.
Supporting Businesses Through Vital Legal Services
The Law Offices of Steven E. Springer offers a wide variety of services in the initial formation of businesses, including:
- Advising on the form of new entities
- Preparing formation documents
- Reserving business names
- Obtaining employee identification numbers (EINs)
- Reviewing Business Transactions
- Drafting bylaws, partnership agreements and operating agreements
- Preparing buy-sell agreements
- Consulting on the formation of corporate boards and advisory boards
- Conducting shareholder meetings
- Business consulting
- Advising on insurance and accounting issues