What Business Entity Should I           Use?      William A. Price         Attorney at Law         Growthlaw.com         1...
Illinois Entity TypesFor-Profit            Nonprofit    C Corporation                               Nonprofit Corporatio...
Todays Focus: For Profit Entities                                      C Corporation                                    ...
From Startup To IPO    Startup: Sole Proprietor    LGOP (Little Group Of Parachutists/People):    Partnership Or Boss/Em...
Sole Proprietorship      (Not A Business Entity)                         Income Tax: Individual                         ...
Mom & Pop BusinessShe                       He    Owns The Assets                                     Does or Runs The ...
Mom & Pop    Share income and other tax liabilities/single    level tax cheaper for joint filers    Separate ownership/l...
Assumed Business Name    Required if any except names of individuals    used as business name    County Clerk Filings & ...
General Partnership    The default business entity    No filing fees to create    Pass-through tax liability    1.5% P...
S Corporation    Requires state filing fees ($150) (Expedited    $100 if online filing, more if walk-in service)    Fran...
C Corporation    Requires state filing fees ($150) (Expedited    $100 if online filing, more if walk-in service)    Fran...
Limited Liability Company                      (My Baby!...)    Filing fee $500    Annual report $250    (Corp. $75)   ...
Your Entity Is Registered Are You Battle Ready?
Now That Ive Got It, How Do I Use           This Thing?    Capital Contributions    Trademark and Business Name    Inco...
Capital Contributions• Proprietor Assets: House, Bank Account,  Stocks, Physical Assets, IP• Friends and Family: IIT $250k...
Whats In A Name?    Entity Name    State Trademark    Federal Trademark    Domain Name(s)    International Trademarks...
Income Accumulation                        C corporations can              have excess              accumulations tax    ...
Contracts With Suppliers and          CustomersSuppliers       Customers    Learn the ways of                           ...
Intellectual Property    “Work For Hire” is for employees: Own Your IP    Define your deliverables    Retain rights to ...
Questions?    Choice of Entity?    Startup Paperwork?    Capital Formation?    Name and Image?    Contracts?    Buy,...
Thanks For Coming!
Upcoming SlideShare
Loading in …5
×

Choice Of Entity

662 views

Published on

Tax, Liability, agency authority, and management in different types of business organization.

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
662
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
7
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Choice Of Entity

  1. 1. What Business Entity Should I Use? William A. Price Attorney at Law Growthlaw.com 1-800-630-4780
  2. 2. Illinois Entity TypesFor-Profit Nonprofit C Corporation  Nonprofit Corporation S Corporation  Religious Corporation LLC  Unincorporated LP Association RLLP Partnership
  3. 3. Todays Focus: For Profit Entities  C Corporation  S Corporation  LLC  LP  Partnership
  4. 4. From Startup To IPO Startup: Sole Proprietor LGOP (Little Group Of Parachutists/People): Partnership Or Boss/Employees Or Fellow Students Or Brothers Or Mom & Pop Initial Organization: Pass-Through Entity at Lowest Filing Fee, Local Outside Investors, Private: Still Pass-through Lots of Owners: Franchises, Investors: Probably Public (Though P/E Prefer Private)
  5. 5. Sole Proprietorship (Not A Business Entity)  Income Tax: Individual  Filing Fee: None Personal Property Replacement Tax: None  Liability for Business Expenses And Loss Causation: All Proprietor Assets  Agency Authority: Proprietor  Management Authority: Proprietor
  6. 6. Mom & Pop BusinessShe He Owns The Assets  Does or Runs The Keeps the Books Business May or May Not  Gets the customers Work In The  Does what hes Business told! Inherits Everything
  7. 7. Mom & Pop Share income and other tax liabilities/single level tax cheaper for joint filers Separate ownership/liabilities or tenancy by the entireties to separate household from business risks May share liabilities, if shes in business/all family assets in business Marital property laws and divorce court, if disputes among owners
  8. 8. Assumed Business Name Required if any except names of individuals used as business name County Clerk Filings & Fees Newspaper published notices ($$$!) Annual renewal New filing/publication with every new owner/location
  9. 9. General Partnership The default business entity No filing fees to create Pass-through tax liability 1.5% Personal Property Replacement Tax General agency of partners Management by agreement
  10. 10. S Corporation Requires state filing fees ($150) (Expedited $100 if online filing, more if walk-in service) Franchise tax 0.0015 of stated capital (minimum $25) Pass-through income tax treatment Personal property replacement tax 1.5% Agency authority in President Management by single class of Shareholders/elect Board of Directors
  11. 11. C Corporation Requires state filing fees ($150) (Expedited $100 if online filing, more if walk-in service) Franchise tax 0.0015 of stated capital (minimum $25) Entity level tax on retained earnings, individual on distributions Personal property replacement tax 2.5% Agency authority in President Management by one or more classes of Shareholders/elect Board of Directors
  12. 12. Limited Liability Company (My Baby!...) Filing fee $500 Annual report $250 (Corp. $75) No franchise tax Pass-through tax Agency in Manager or Members Management by Members/Manager Class(es)
  13. 13. Your Entity Is Registered Are You Battle Ready?
  14. 14. Now That Ive Got It, How Do I Use This Thing? Capital Contributions Trademark and Business Name Income Accumulation Contracts With Suppliers and Customers Hold Intellectual Property
  15. 15. Capital Contributions• Proprietor Assets: House, Bank Account, Stocks, Physical Assets, IP• Friends and Family: IIT $250k, U of C $850k, here?• Outside investors (?angels? ?suppliers??customers?)• Private equity (VC, p/e funds for M&A)• Public Investments
  16. 16. Whats In A Name? Entity Name State Trademark Federal Trademark Domain Name(s) International Trademarks Policing The Mark: Lawyer Letters, Courts Policing The Mark: Takedown Notices, ICANN
  17. 17. Income Accumulation  C corporations can have excess accumulations tax  S corp/passthroughs might want to buy saleable assets that appreciate  EBITDA multiples are your sale value
  18. 18. Contracts With Suppliers and CustomersSuppliers Customers Learn the ways of  Under-promise, the UCC overperform Price vs Quality  Recover your costs Noncircumvent  Airborne or Fedex? agreements  Get paid upfront, Get extended pay early, every time terms
  19. 19. Intellectual Property “Work For Hire” is for employees: Own Your IP Define your deliverables Retain rights to your “Expedebits” Build Proprietary Products And Services Think About Business/Product Positioning Register Your Trademarks, Copyrights, and Patents
  20. 20. Questions? Choice of Entity? Startup Paperwork? Capital Formation? Name and Image? Contracts? Buy, Sell, Recap?
  21. 21. Thanks For Coming!

×