United States Business Formation
Are you ready to scale your business to the U.S here is a list a different business types and structures that we can help establish inside the United States.
A trust
A trust is a legal instrument that allows someone to hold property that someone else owns for the other person’s benefit. A client might use a trust in order to minimize estate taxes and minimize the hassles that can go along with estate distribution. In other cases, a trust is helpful to manage assets for a minor or a person with disabilities. Attorneys help their clients determine if a trust is the right vehicle for them to reach their estate planning goals.
A Partnership Agreement
A partnership is formed when two or more people join, or partner, together to run a business. Each partner has equal share in the net profits and losses of their business. Like a sole proprietor, each partner reports their income on their personal tax return and pays self-employment taxes to the IRS.
They are also personally liable for financial debt and obligations of their company and also the actions of other partners. Although partnerships can be formed through oral agreements and handshakes, written agreements can be the best option in the event of disputes or lawsuits between partners.
Limited Liability Company
One of the newest organizational structures for businesses is limited liability company (LLC). The limited liability structure is considered a hybrid as limited liability companies can be formed as corporations or partnerships. LLCs can provide owners, who are commonly referred to members under this structure, the protection from liability and other obligations similar to a corporation. Limited liability companies can also be set up and managed like partnerships. The taxation of LLCs also depends on its structure. Due to its limited protection, some companies such as banks and insurance companies are restricted from being LLCs.
The Corporate Structure
The most complex organizational structure for businesses is the corporation. This type of business structure separates the liabilities and obligations incurred by company operations from being the responsibility of the owners. Corporations are regulated by the laws of the state they are set up in.
Unlike sole proprietor and partnership businesses, corporations are taxed as separate entities at corporate tax rates. The IRS taxes corporation owners at individual tax rates. There are two common types of corporation structures: Subchapter C and S. The different between the two subchapters stem from different tax rules. Ordinary corporations are considered Subchapter C corporations.
Subchapter S corporations, unlike Subchapter C companies, can pass income and losses onto their shareholders to avoid paying federal income taxes. This prevents double taxation of corporation profits.