If you are trying to decide which structure to choose, we are here to help. Below you will find a simple to follow explanation of the more popular entity types. As a service company, Form-A-Corp is designed to provide you with as much information as is needed for you to make educated decisions for your business. If you need further assistance, please do not hesitate to utilize our live chat feature to the right when available or email an Incorporation Specialist directly for a quick answer to your specific questions.
For any business, the legal structure is very important. The selection of a suitable structure can help you plan for the prospective growth of your business. It can be said directly that tax considerations are not the only factor to consider when deciding on a structure. Read more on what to consider below or email us at info@form-a-corp.com and get a direct answer to your question from an Incorporation Specialist.
The two most popular business structures available are the Corporation and the Limited Liability Company. Additionally, S-Corps or “Small Corporations” have gained increased popularity in recent years for their dynamic liability and tax structures. S-Corps are created post incorporation through an additional filing forwarded to the IRS. This service is available in the “Additional Services” section of the online order system.
Incorporation – The corporation may be established with the help of drafting the articles of incorporation and by registering the company with the provincial government. A corporation will have Directors and are governed by the Bylaws set forth by the Directors and in some cases in conjunction with a Board of Directors which can include owners and/or other individuals in an advisory position. The corporation may issue shares to its shareholders, in order to generate funds to start or fund operations and it can pay a salary to its owners or dividends to its shareholders.
Organization – The limited liability company is created through the filing of articles of organization and by registering the company with the provincial or federal government. A limited liability company will have Members and will be Member Managed or Manager Managed in the event the proprietor or owner chooses to appoint a manager in a position of accountability but not necessarily ownership. The limited liability company may issue membership certificates in order to generate funds to start or fund operations and it can pay a distribution to its owners or dividends to its shareholders. A limited liability company will be treated by the IRS as a “disregarded entity” and will be afforded “pass-through” taxation whereby the net result of the LLC return is passed through the business return to become a line item on the personal returns of the Members.
