Lawyer Monthly Magazine - October 2019 Edition

There are special limits on S corps. S corps can’t have more than 100 shareholders, and all shareholders must be U.S. citizens. You’ll still have to follow strict filing and operational processes of a C corp. S corps can be a good choice for a business that would otherwise be a C corp, but meet the criteria to file as an S corp. An S-Corporation should consider obtaining the following insurance: 1. General Liability insurance; 2. Commercial Property Insurance; 3. Business Owner’s Policy (BOP); 4. Commercial Auto Insurance; 5. Worker’s Compensation Insurance; 6. Data Breach Insurance; 7. Life Insurance (Key Person); 8. Family Health Insurance (via the Affordable Health Care Act). F. A B-Corporation: According to the Small Business Administration (SBA), a benefit corporation, sometimes called a B corp, is a for-profit corporation recognized in a majority of U.S. states. B corps are different from C corps in purpose, accountability, and transparency, but aren’t different in how they’re taxed. B corps are driven by both a defined mission and profit. Shareholders hold the company accountable to produce some sort of public benefit in addition to a financial profit. Some states require B corps to submit annual benefit reports that demonstrate their contribution to the public good. A B-Corporation should consider obtaining the following insurance: 1. General Liability insurance; 2. Commercial Property Insurance; 3. Commercial Auto Insurance; 4. Worker’s Compensation Insurance; 5. Data Breach Insurance; 6. Life Insurance (Key Person); 7. Small Group Health Insurance. protection to its owners from personal liability, but the cost to form a corporation is higher than other structures. Corporations also require more extensive record-keeping, operational processes, and reporting. Unlike sole proprietors, partnerships, and LLCs, corporations pay income tax on their profits. In some cases, corporate profits are taxed twice — first, when the company makes a profit, and again when dividends are paid to shareholders on their personal tax returns. A C-Corporation should consider obtaining the following insurance: 1. General Liability insurance; 2. Commercial Property Insurance; 3. Commercial Auto Insurance; 4. Worker’s Compensation Insurance 5. Data Breach Insurance; 6. Life Insurance (Key Person); 7. Small Group Health Insurance. E. An S-Corporation: According to the Small Business Administration (SBA), an S-corporation, sometimes called a “Subchapter S corp”, is a special type of corporation that’s designed to avoid the double taxation drawback of regular C corps. S corps allow profits, and some losses, to be passed through directly to owners’ personal income without ever being subject to corporate tax rates. Not all states tax S corps equally, but most recognize them the same way the federal government does and taxes the shareholders accordingly. Some states tax S corps on profits above a specified limit and other states don’t recognize the S corp election at all, simply treating the business as a C corp. S corps must file with the IRS to get S corp status, a different process from registering with their state. G. A nonprofit corporation: According to the Small Business Administration (SBA), nonprofit corporations are organized to do charity, education, religious, literary, or scientific work. Because their work benefits the public, nonprofits can receive tax-exempt status, meaning they don’t pay state or federal taxes and income taxes on any profits it makes. Nonprofits must file with the IRS to get tax exemption, a different process for registering with their state. Nonprofit corporations need to follow organizational rules very similar to a regular C corp. They also need to follow special rules about what they do with any profits they earn. For example, they can’t distribute profits to members or political campaigns. Nonprofits are often called 501(c)(3) corporations — a reference to the section of the Internal Revenue Code that is most commonly used to grant tax-exempt status. A Nonprofit Corporation should consider obtaining the following times of insurance: 1. General Liability insurance; 2. Commercial Property Insurance; 3. Commercial Auto Insurance); 4. Worker’s Compensation Insurance 5. Data Breach Insurance; 6. Small Group Health Insurance. Conclusion Although determining the proper business structure takes a lot of time to consider the various options, the thoughtful undertaking will be time well spent. Once a woman gets her business up and going on a firm foundation, she will have a real opportunity to generate the income needed to fund her female-headed household well into the future. LM First Choice Lawyers By Selwyn D. Whitehead, Esq., Law Offices Of Selwyn D. Whitehead 71 OCT 2019 | WWW.LAWYER-MONTHLY.COM ABOUT SELWYN D. WHITEHEAD ESQ. Selwyn D. Whitehead Esq. is a San Francisco Bay Area bankruptcy and tax attorney whose practice focuses on helping her clients manage their wealth through effective estate and tax planning and/or manage their debt through debt restructuring or bankruptcy. Selwyn also helps her clients facing foreclosure and represents clients with emotionally and financially “taxing” issues before the Franchise Tax Board, the IRS and the U.S. Tax Court. Selwyn is also a Bankruptcy Law Certified Specialist, whose been Certified by the State Bar of California Board of Legal Specialization. Prior to going into private practice, Selwyn managed a group of attorneys and paraprofessionals in Fireman’s Fund Insurance Company’s Claims Department, where she was responsible for auditing the claims and case handling practices, performance, fees, and expenses of outside defence counsel. And prior to that assignment, she worked for many years as a financial services industry consumer advocate.