Entity formation


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Choosing the right entity for your business is crucial, we've put together the basic entity types and detailed the differences for you.

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Entity formation

  1. 1. Forming A Business Entity Gener8! Business Ready in 8 Weeks
  2. 2. What Is A Business Entity? • A “Non-Real Person” • Legal entity • As an owner you act on behalf of the business Forming A Business Entity 2
  3. 3. Business Legal Structures & Name • Determine your business’s legal structure: 3Forming A Business Entity Sole Proprietorship Partnership (many types) Limited Liability (many types) Corporation
  4. 4. Sole Proprietorships • For profit business owned by one person – Easiest business to set up and operate – Profits are taxed once – Unlimited liabilities – Business ends at death of owner 4Forming A Business Entity
  5. 5. Partnerships • A business owned by any two or more persons who contribute money, labor and skill to a business and share in profits, losses, and management – Profits are taxed once – Liability is shared among partners 5Forming A Business Entity
  6. 6. Corporations • A business formed under state and federal law. It is treated legally as a taxable entity, distinct from the individuals who own it. – Most complex form of business to set up and operate – Profits may be subjected to double taxation – Owner/Officers have limited legal liability – Business continues after death of owner(s) 6Forming A Business Entity
  7. 7. Limited Liability Company (LLC) • A hybrid business structure composed of aspects of a partnership and corporation. • Owners are shielded from personal liability and profits and losses pass directly to the owners without taxation of the entity itself. – Moderately easy to set up and operate – Passed through taxation – Owner/Officers have limited legal liability – Business may choose to terminate upon death or withdrawal of member (dependent on operating agreement) 7Forming A Business Entity
  8. 8. Federal, State, & Local Taxes 8 Federal State County & City Payroll taxes Sales & Use taxes Property Taxes Income taxes Permits Permits FICA Unemployment Insurance Franchise Tax Forming A Business Entity
  9. 9. Federal, State, & Local Resources • Federal: – IRS – OSHA – Equal Employment Opportunity Commission • State: – Comptroller’s Office – Secretary of State – Texas Workforce Commission • Local: – San Antonio Economic Development Center – County Clerks Office 9Forming A Business Entity
  10. 10. Get Connected & Learn More www. mygenfcu.org Email: smallbiz@mygenfcu.org Sign Up for our business classes Connect with us via social where we talk personal and small business tips to help you reach your money goals