C Corporation Considerations

A C Corp has the widest range of deductions and expenses allowed by the IRS, especially in the area of employee fringe benefits. A C Corp can set up medical reimbursement and other employee benefits, and deduct the costs of running these programs, including all premiums paid. The employees, including you as the owner/shareholder, will also not pay taxes on the value of those benefits. This is not the case in a flow-through entity, such as an S Corp, LLC or LP. In each of those cases the entity may write off the costs of the benefits, but any employee/shareholder who owns more than 2% of the entity will pay taxes on the value of their benefits received. So, if having the maximum deductions and all of the employee fringe benefits on a tax-free basis is important to you, a C Corp may be your entity choice.

C corporations are great for a business that sells products, has a storefront and employees, and may or may not have a warehouse where it keeps its inventory. C Corps don't work well with businesses that want to hold appreciating assets, such as real estate, because of the tax treatment on the sale of these assets.

The most often-cited disadvantage of using a C Corp is the "double-taxation" issue. Double-taxation happens when a C Corp has a profit left over at the end of the year and wants to distribute it to the shareholders as a dividend. The C Corp has already paid taxes on that profit, but once it distributes the profit to its shareholders, those shareholders will have to declare the dividends they receive as income on their personal tax returns, and pay taxes again, at their own personal rates.

There are many things you can do to avoid the double-taxation scenario. Structure the C Corp so that there are no profits left over -- use all of the write-offs and deductions allowed by the IRS to reduce the C Corp's net income. Offer great benefit plans! Pay higher salaries to yourself and the other owner/employees than you would if you were using a flow-through entity such as an S Corp. Yes, you will have to pay payroll taxes and personal income taxes on those monies, but you would pay personal taxes on dividends paid to you anyway. And it may be that in the big picture, the savings on one side outweigh the additional taxes paid on the other side.

The decision as to what entity is best for you really does, in so many cases, hinge on taxes, and that is why, with any corporate-related decision, you are wise to seek the advice and assistance of a good CPA.

Some quick things to note on C Corps:

· They can have an unlimited amount of shareholders, from anywhere in the world.

· For Nevada and Wyoming corporations, officers and directors can reside anywhere in the world;

· They can have several different classes of shares.

· They are the most widely recognized business entity in the world, and are the premier entity for going public.

In Nevada and Wyoming, nominee, or stand-in, officers and directors can be utilized, adding extra levels of privacy.

While we like and often use S Corporations, we keenly appreciate that C Corporations have their merit and place in your entity structure strategy.

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Get More Customers - The Art Of Building Profitable Business Alliances And Joint Ventures

Whether you're King of the Hill and ready to Create Your Own Movement or you want to become the next Global Brand here's absolutely the most important advice you'll get from anybody. . . .form an alliance with your competition. Yeap you heard me right. Ever read the Art of War? Well I'll capsulize it for you - "Keep your Friends Close" and your "Enemies Closer" 

You're good, yes? You've made it up the Hill. 

But you want more. You want to be BIG. Really BIG! You want to own your space, you want to dominate your market and most of all, you want to be "The One" that everyone talks about - am I close?

So what's the issue? You have good leadership skills, a reasonably productive sales process and you're making money right? Ahhh, that's it you're NOT making enough money. Well building an "Intelligent Business Alliance" is a way to profit from using today's most important strategic tools, joint ventures, creative collaboration, and strategic partnerships. Whether you're a "self-employed" entrepreneur, the best way to compete right now is to identify your competition, sort through how you can and cannot leverage the majority of these businesses and then form strategic alliances with the rest. 

Think about it, whether it's local market ownership or global market penetration and domination it will take this kind of evolved thinking. Even becoming the "go to" business in a local market will rely on getting past the "lone ranger" mentality. 

Conflict and competition are not part of the new business dynamic. The Stone Age is called the 20th Century. Cooperation and mutual benefit reign supreme in the 21st Century and those who are smart enough to embrace the concept and plan strategically will own their markets. 

So look for a good alliance partner to stand side-by-side with and together you can make "It" happen for both your businesses. Defining "it" together is where the finesse comes in. 

Some suggestions: 
Look for a company who has expertise, skill sets where you "don't" i.e. you have an established business but not enough customers? There are thousands of experienced sales and marketing consultants out there just looking to help you get more customers 

Let's say you have a new product that you want to market on the internet but you don't have a list of customers - FIND A COMPANY WITH THE SAME KIND OF PRODUCTS same target market and an established list of customers and "partner with them". 


It makes good business sense to give up a percentage of your profit to this new "strategic partnership" to 'get into business" quickly via someone else's website and lead list.

So you've all heard that the best partnerships are "Win-Win" where both sides get "something" out of the alliance. You've Heard Right!

I challenge you to reexamine your thinking about creative collaboration and approach joint ventures and strategic partnerships with a new awareness. 

If you move toward potential business alliances armed with the clarity that comes from being 'educated" on the subject and equipped with specific tools to evaluate and manage your collective business - YOU WILL SUCCEED. I GUARANTEE YOU the time you invest to better understand today's most important strategic business tools - joint ventures, creative collaborations and strategic partnerships will serve you well over a lifetime.
Remember, conflict and competition are not part of the new business dynamic.

Author


a.k. Tobor is in Corporate Recovery having escaped the Fortune 100 world in 2001 to create A Growing Enterprise™ (AGE, Inc) a San Francisco based multi-disciplinary business consultancy. The practice analyzes business performance for small and mid-size enterprises, entrepreneurs with "that one big idea", as well as, corporations looking a competitive edge.

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Read Business Guides Before You Start A Business

Everybody needs a means through which they can make a living. This is because you have basic needs that you need to cater for and also other luxuries that you may want to have. There are limited job opportunities in the market nowadays and therefore you need alternatives. One of the ways you can do this is through starting up your own business. Those who do not have any form of formal education or training and those who want to make some extra money can start their own businesses. The main aim of starting a business venture for most people is to make profits. This is where a business guide comes in handy.

The first step to take after deciding on putting up a business establishment is to identify the kind of business opportunity you will go for. While there are numerous business opportunities that you can start, not all of them can be successful to you. The success of a business will depend on various factors. Choosing a business that you are familiar with is very important as you will have particular know-how on how to solve various business related challenges and how to avoid them in future.

Once you have identified the business opportunity that suits you best, you have to lay out a detailed business plan. This will act as a guideline for you when it comes to your business in terms of the market your goods and services are targeted at, the competition, your source of capital and the way you will manage your finances. This plan proves to be important when you need to apply for financial assistance from a financial institution or even an individual.

One of the most important steps when starting a business is getting the necessary funds required. The methods of raising money to start a business vary from person to person. The nature of your business will also determine how much capital you will need. The sources of capital include: your personal savings, loans from financial institutions and money that you get from your family and friends.

Once you have come up with enough capital, it time now to start up the business. You will need a premise. Choose a premise which is situated in a strategic location where you will have an easy access to your customers and suppliers. This may not be necessary if you wish to work from home. You will then give your business a name and eventually have it registered with the relevant authorities. Registration goes with obtaining the permit. This is very important as you don't want to have running battles with authorities. Once you have all this in place you can then have your products or services ready for your customers.

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