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What Type of Business Entity Should You Choose?

Of all the choices you make when starting a business, one of the most important is the type of legal structure you select for your company. This decision will have an impact on how much you pay in taxes,  the amount of paperwork your business is required to do,  the personal liability you face, and your ability to raise money.


It is  not a decision to be entered into lightly and one that should only be made after speaking with a licensed attorney. 


Contact me for assistance in selecting the right type of business. We will go over the pros and cons of various business entities, and select the one that fits your individual needs. 


See below for pricing.


Business Entity Formation

Corporation

A corporation is an entity that is separate and apart from its owners – known as shareholders. A corporation provides limited liability to its shareholders – meaning the business is responsible for its own actions. A corporation is a good choice if the business will require outside investors, particularly venture capital, or will become public. Corporations come in two varieties: C and S. These are IRS tax classifications, and the choice will determine how the corporation is taxed. Contact me to form your corporation today!


Fee:  $550 plus state filing fees 


Includes:

  • Verify business name availability
  • Preparation and filing of organizational documents
  • Bylaws
  • Obtaining a Federal Tax ID number
  • Obtaining NY Certificate of Authority (if applicable)
  • Personalized advice from a licensed New York business attorney – always included

limited liability company (LLC)

An LLC is an increasingly popular choice, especially for a small business with few partners and no outside investors. The owners of an LLC are called members or manager. An LLC allows for more flexibility when it comes to taxes. An LLC can elect to be taxed as a partnership, a corporation, or a disregarded entity for a single member LLC. An LLC also requires fewer formalities than a corporation. This option fits most small business just starting out. Contact me if you think this type of entity will fit your needs best.


Fees:

  • $400 plus state filing fees Single Member
  • $550 plus state filing fees Multi-Member
  • $750 plus state filing fees Manager Managed 


Includes:

  • Verify business name availability
  • Preparation and filing of organizational documents
  • Custom operating agreement
  • Obtaining a Federal Tax ID number
  • Obtaining NY Certificate of Authority (if applicable)
  • Does not include NY State publication fees 
  • Personalized advice from a licensed New York business attorney 

501(c)(3) - Nonprofit Organization

A  501(c)(3) entity is an organization that enjoys federal tax exemption pursuant to 501(c)(3) of the US Internal Revenue Code. Entities that can seek 501(c)(3) determination from the IRS include corporations, trusts, community chests, unincorporated associations, and LLCs whose members consist of other 501(c)(3) entities. The vast majority of 501(c)(3) organizations, however, are corporations. Contact me for help in forming your nonprofit organization.


Fee: $950


Includes:

  • Drafting bylaws which sets forth the structure of the organization and creates a governing board with final authority for the organization
  • Incorporating as a nonprofit corporation in the state of choice
  • Obtaining tax-exempt status from the IRS and the state in which the organization is based 
  • Completing additional documents relating to state compliance, annual reporting requirements, newly instituted IRS compliance policies, and sound corporate record-keeping practices