Business Incorporation The most common forms of incorporations for small businesses are Subchapter S corporations. These corporations provide the liability protection of a corporation while allowing the tax liability flow through to the individual owners. In other words, the corporation pys no income tax. With a C corporation the corporation is taxed yet so are the owners.   Many small business owners ended up chosing between a SubChapter S corporation and a Limited Liability Company (LLC).  The LLC can offer more flexibility than a SubChapter S but, often, the owner of a small business does not need the extra flexibility.  You should discuss with the attorneys of Nash & Lodge the differences between the two to see if you need or want the extra flexibility of a LLC.  We also recomend that you speak to your tax acountant to see if your accountant has a preference for one form over the other given your specific business and tax situation.    If you are interested in looking into a S Corporation, please fill out the Business Entity Creation Information Form. Generally, we are able to create an S corporation for you on a flat fee basis. If you are interested in a Non-Profit Corporation, please click the following link for information, request forms and cost options. Generally, we are able to create a Non-Profit Corporation for you on a flat fee basis. If you are interested in a C Corporation or have general business formation questions, please contact one of the attorneys at Nash & Lodge.

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Most Common Business Entity Mistake The most commmon mistake we see is where the business entity is filed with the Secreaty of States office and an EIN is obtained but the remaining steps of creating and maintaining the business are neglected.  In order to have a vaild business entity you must complete all of the intitial business entity documents, apply to the IRS for LLC of SubChaper S status (unless you are creating a C-Corporation) and continually maintain your Businmess Entity book.  If you do not properly create and maintain your business entity you can lose the protection of that business entity and creditors can go after your personal assets.   Filing with the Secretary of State does not itself create a business entity it is merely the first step.  You need resoultions dealing with the creation of the business entitry, you needs rules created to govern the business entity and you need to issue stock or units to the owners of the business entity.  You should also strongly consider having a buy/sell agreement that deals with issues relating to the sale of the owners interest in the business entity without creating an undue hardship on the business entity.  In addition, a good buy/sell agreement helps the owners agree to how to value the business entity if the case of a potential sale.   Once a business entity is creating the owners of the business entity must always treat the business like the seperate entity that it is.  Important decisions must be documented as "resolutions" of the business entity.  The rules for the business entity must be follwed with respect to notice to the owners of any meeting.  When owners executed documents binding the business entity they must sign in their corporate capacity, not as an indivdual -  "John Doe, as president" instead just as "John Doe". .

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