A Crash Course to Starting Your Business

If you’ve decided to start your own business, first of all, congratulations! This is a huge step on your path to success. It takes bravery and determination to take a business idea and commit to making it happen. Great job!

You’ve already done a lot of the first steps of starting a business. You’ve had the initial idea, you’ve given it some time to grow into a plan, and now you are beginning to take action to make your dream a reality. Now for the fun part. Launching a business is as challenging (in a good way) as it is exciting. One of the most important early steps that many people miss is selecting your type of entity for your business. 

The words “business entity” refer to the way a  business is structured. The two most popular types of business entities are corporations or corps and limited liability companies, or LLCs.

Knowing the differences between these structures is the only way to figure out which is better suited to your business venture. This is something the lawyers at Robertson & Williams can help with. Most people already understand the main purpose of both types – to protect your personal assets from business liability. Both types of entities are filed with the government and require separation of business finances from personal finances.

The biggest differences between a corporation and an LLC comes down to maintenance and taxes. Both may be owned by individuals but depending on the tax election made, profits and losses are handled differently. For an “S” tax election or a partnership tax election, profits and losses go directly to the individual(s) who own the business.These are “pass-through entities,” because the profits and losses of the business pass through the business to the owners. If the company makes a “C” tax election, then the company pays the taxes on its earnings, not the owners. . A company, regardless of whether a corporation or an LLC can make any of these tax elections. 

In Oklahoma, an LLC generally has fewer reporting and legal requirements for maintaining its existence than a corporation. Corporations in Oklahoma have franchise tax reporting and annual meeting requirements whereas LLC’s have only an annual report with a nominal fee due the Secretary of State and has no annual meeting requirements. 

Ultimately, sitting down with a lawyer who knows your business structure is the best way to make this important decision. This is one of the many ways Robertson & Williams can help you with your new venture! Give us a call at (405) 848-1944.

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