If you’re a single-owner business, why not (1) form an LLC and operate as an SP until you generate enough earnings to justify (2) electing S-Corp taxation (and save on the SE tax accordingly), and, should you generate enough interest, then (3) convert to a C-Corp to reap the benefits of going public, etc. Otherwise, the costs of complying with the C-Corp form (at least in a manner that minimizes your risk of exposure to piercing) easily outweighs any associated benefits-and we’re not even talking about the double, entity-level taxation that you can avoid with an Sub-S or DRE taxation (or Sub-K if you’re a partnership). With an LLC, you (1) protect your personal assets from business liability, (2) minimize your federal income-tax obligations, and (3) have a free range of options wrt how to structure your business (an organizational flexibility that you most definitely do not get with a C-Corp).
Here is one reason: taking on investors requires a conversion to C-Corp. Another reason: you want to have investors from all over the world invest in your business. S-Corp rules do not allow anyone but US persons to invest in your business. Meanwhile the LLC doesn't allow as many tax-deductions as the others as it is a flow-through entity that sends business income to a personal tax return. Why put handcuffs on the business in the beginning and then have to pay someone big-time money to remove them?
Saidul Chowdhury : Hi sir, i am shekar Chowdary from hyderabad,telangana..currently i am taking care of some us books of accounting, if you required the accounting services with the best and low prices... Please contact me i will take care of your books of accounts.
Nice interview! Subscribed because you have Mobb Deep playing at the end interview! Major kudos! Good business and Good taste in music means I need to stick around!!! =) Thanks for positng!!
@@rodrigo445678 with an mpv showing decent traction? Definitely. With an mpv that shows technical ability and some usage? Probably. Happens all the time. People even raise on just the idea sometimes, depending on prior experience and pedigree.
Pedro Escobar No. Subchapter refers to the IRS IRC: i.e., Sub-S, Sub-K, Sub-C. When people initially learn these forms, they develop similar “mental shortcuts” that (unfortunately) stick with them into practice. For example: “S” is for small “B” is for benefit However, an S-Corp can be considered “small” with respect to the number of shareholders permitted: I think it’s capped at 75 or 100. But this does not mean it will necessarily be small with respect to revenue or earnings, etc.
" How do you weigh the pluses and minuses on your facts? Usually, C corporations make no sense for small businesses due to double tax on income and on proceeds of sale. Besides, if you incur losses, you want to claim them personally, favoring an S. Whatever you do, get some advice, and pay attention to the tax rules." Robert W. Wood Contributor Forbes tax lawyer based in San Francisco www.forbes.com/sites/robertwood/2012/05/03/c-or-s-corporation-choice-is-critical-for-small-business/
As stated, its on what you're aiming to do. If you're hoping to be the next big thing, with lots of investors coming on board, hiring 30+ people etc, then C is the way to go. If you can manage by yourself (don't need investors or lots of staff), S works.
Luv the interaction and the down-to-earth approach,, keeping it simple
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If you’re a single-owner business, why not (1) form an LLC and operate as an SP until you generate enough earnings to justify (2) electing S-Corp taxation (and save on the SE tax accordingly), and, should you generate enough interest, then (3) convert to a C-Corp to reap the benefits of going public, etc.
Otherwise, the costs of complying with the C-Corp form (at least in a manner that minimizes your risk of exposure to piercing) easily outweighs any associated benefits-and we’re not even talking about the double, entity-level taxation that you can avoid with an Sub-S or DRE taxation (or Sub-K if you’re a partnership).
With an LLC, you (1) protect your personal assets from business liability, (2) minimize your federal income-tax obligations, and (3) have a free range of options wrt how to structure your business (an organizational flexibility that you most definitely do not get with a C-Corp).
Here is one reason: taking on investors requires a conversion to C-Corp.
Another reason: you want to have investors from all over the world invest in your business. S-Corp rules do not allow anyone but US persons to invest in your business.
Meanwhile the LLC doesn't allow as many tax-deductions as the others as it is a flow-through entity that sends business income to a personal tax return.
Why put handcuffs on the business in the beginning and then have to pay someone big-time money to remove them?
@@samjordan8800 great advice. for people that look long term this would be titled long term thinking. great input
@@samjordan8800 so in any business adventure its best to start with an s-corp?
still deciding on LLC ,s-corp or c-corp for my business
Thank you very much ! Really like the way you organize the discussion.
Great focused discussion, I will check out other videos on your channel.
Great vid. Thank you!
Too much yapping about random "what if" scenario. Make a short 1 min video with just the main points.
tl;dr - C Corp. Everything else is explanation why that is the case
Just remember you pay double taxes on C Corps as opposed to the pass through with S corp and partnerships.
TLDW: Start as a C corp
Great explanations. Thank you all!
great video thanks!
I have s-corp, which is pretty good as a sole proprietor and I have no complain
Saidul Chowdhury : Hi sir, i am shekar Chowdary from hyderabad,telangana..currently i am taking care of some us books of accounting, if you required the accounting services with the best and low prices... Please contact me i will take care of your books of accounts.
Nice interview! Subscribed because you have Mobb Deep playing at the end interview! Major kudos! Good business and Good taste in music means I need to stick around!!! =) Thanks for positng!!
Should I get a corporate checking account before or after I incorporate as a Delaware C Corp?
He got only his own questions answered.
I feel like a learned alot about his Hand Up business. Would rather have heard more generalized explanations.
Lol her last name is literally "Profit" 😅 I'm listening
C Corp.
Should you go for a C-corp if you are pre-revenue?
If you are raising money yes.
@@startups In you experience, is it possible or probable to raise money pre-revenue just with an mvp?
@@rodrigo445678 with an mpv showing decent traction? Definitely. With an mpv that shows technical ability and some usage? Probably. Happens all the time. People even raise on just the idea sometimes, depending on prior experience and pedigree.
I thought "S" is for subchapter
Pedro Escobar No. Subchapter refers to the IRS IRC: i.e., Sub-S, Sub-K, Sub-C. When people initially learn these forms, they develop similar “mental shortcuts” that (unfortunately) stick with them into practice. For example:
“S” is for small
“B” is for benefit
However, an S-Corp can be considered “small” with respect to the number of shareholders permitted: I think it’s capped at 75 or 100. But this does not mean it will necessarily be small with respect to revenue or earnings, etc.
I am from indonesia and want to start company in US, but how?
" How do you weigh the pluses and minuses on your facts? Usually, C corporations make no sense for small businesses due to double tax on income and on proceeds of sale. Besides, if you incur losses, you want to claim them personally, favoring an S. Whatever you do, get some advice, and pay attention to the tax rules."
Robert W. Wood
Contributor Forbes
tax lawyer based in San Francisco
www.forbes.com/sites/robertwood/2012/05/03/c-or-s-corporation-choice-is-critical-for-small-business/
As stated, its on what you're aiming to do. If you're hoping to be the next big thing, with lots of investors coming on board, hiring 30+ people etc, then C is the way to go. If you can manage by yourself (don't need investors or lots of staff), S works.
stalker
TLDW: Start as a C corp
Too much yapping about random "what if" scenario. Make a short 1 min video with just the main points.