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Incorporate Business Online
If you want to incorporate a business online, it’s easier and more convenient now than ever. The only thing you need to do is to choose the best legal entity for your business. Your basic choices are sole proprietorship, partnership, corporation, and limited liability corporation (LLC). Each of these legal entities has their own pros and cons. But once you decide what’s best for your business, it is straightforward to incorporate your business online.
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When I start a business, the two things that I consider in terms of legal entity selection are personal asset protection and tax treatment. I am not a lawyer or an accountant. So take what I say from a businessman’s perspective. You should always consult with your own professional advisers.
There are some key differences between the basic legal entities. A sole proprietorship, for example, offers the advantage of being quick and easy to setup. In terms of taxes, you as the owner would report your profit and loss on your personal tax return. The downside to this entity is that you as the owner are personally liable for business debts.
Another type of legal entity that I consider is an LLC. In an LLC, the owners have limited liability for business debts. Profits and loss can be allocated independently of business ownership interests. And you can choose being taxed as a partnership or a corporation. The downside is that LLCs are relatively new so there aren’t that many precedents.
The type of entity that most people are familiar with is a Corporation. There are two flavors S Corporation or C Corporation. For both entities, the owners have limited personal liability for business debts. In an S-Corp, owners report profit or loss on their personal tax returns. In a C-Corp, owners can split corporate profit among the owners of the corporation. The main downside is the complexity of maintaining the paperwork.
This website contains a lot more detail to help you learn more about the various legal entities.
You can also use them to incorporate a business online. I have used them for many years and they work well with very reasonable rates.
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