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If you have been considering forming a corporation or other business entity to provide yourself with limited liability and financing options in your business venture, you have made an important first step. You may have compared the tax benefits of corporations and limited liability companies or limited partnerships. If you have done so, you likely realized that corporations are taxed twice, while limited liability companies and limited partnerships are taxed once. While a corporation’s profits are taxed once as the corporation’s income and again when the profits are distributed as dividends, a limited liability company or limited partnership’s profits flow through the entity and are only taxed once as personal income to the individual member of the limited liability company or partner in the limited partnership. This is referred to as flow-through taxation. Based solely on the tax treatment of corporations, you may be prepared to use a limited liability company or limited partnership for your business.

While limited liability companies and limited partnerships feature outstanding charging order protection, Nevada has recently extended such protection to corporations with between two and seventy-five shareholders.

Before you decide which business entity to use, there is one more option for you to consider. If you choose to use a limited liability company or a limited partnership, your business may limit its financing options. Financing for a limited liability company or a limited partnership may not be as readily available as financing for a corporation, because interests in such entities are not as transferable as interests, or shares of stock, in a corporation. An S-corporation is the alternative that provides both financing options and flow-through taxation; however, to be treated as an S-corporation, your business must do the following:

• Incorporate the Business – As with a regular corporation, referred to as a C-corporation, an S-corporation must prepare and file Articles of Incorporation with the state, prepare and operate under Bylaws, operate under a Board of Directors and corporate officers, and engage in corporate formalities.

• File an S-Corporation Election Form – To be eligible for S-corporation tax treatment, the corporation must (1) be a corporation organized in any U.S. state, (2) not be an ineligible corporation (certain types of businesses are not eligible), and (3) have only one class of stock. If eligible, the corporation may file an S-corporation election form, Form 2553, with the Internal Revenue Service within forty-five days after incorporating. While this will allow flow-through federal taxation, it is important to note that five states do not recognize S-corporations and may tax the corporation as a C-corporation. It is also important to note that S-corporations are not eligible for certain tax deductions that C-corporations may enjoy.

• Notice and Obey S-Corporation Limitations – Once the corporation has made its S-corporation election, it must notice and obey the limitations on S-corporations to maintain its flow-through tax status. If the corporation violates any of the following limitations, it will lose S-corporation status and will not be eligible for flow-through taxation for five years: (1) it must have one hundred or fewer shareholders; (2) all of its shareholders must be individuals, descendants’ estates, estates of individuals in bankruptcy, or certain trusts, because business entities may not be shareholders; and, (3) all of its shareholders must either be United States citizens or resident aliens in the United States (nonresident aliens may not be shareholders). If the corporation loses its flow-through tax status, the Internal Revenue Service will treat it as a C-corporation.

Every business is unique. Your business’s form should be based on your specific circumstances. While the limitation on the number and types of shareholders allowed in S-corporations may affect financing options, such limitations may have less practical importance than the limitations on financing options created by using a limited liability company or a limited partnership. Accordingly, S-corporations’ tax benefits, management structure and transferability of shares may provide the benefits that your business needs in an entity that also provides you with limited liability. By considering your business’s options and choosing the best available business form, you will ensure that you take advantage of available opportunities.

There are thousands, if not millions of people, who dream of ending the daily commute to the office and yearn to be able to work from home. Of course, there are companies who allow their employees to telecommute, but the ideal that many aspire is to start their own home based business and are looking for business opportunities that enable them to make money online.

If you are thinking of starting a home business, you do need to research what it will involve. Being able to work at home may seem idyllic, but building your own home-based business does require a lot of commitment. It is essential to research what your responsibilities are as a small business owner and how you are going to apply these to your home business.

You may be desperate to work at home and see yourself running a successful home-based business in the near future. However, you must think honestly whether you really have the knowledge and the capabilities required.

One of the major differences between working in an office environment and running a home business is that you are not going to have the same interaction with fellow workers that you are used to. When you work at home, it can be a very lonely experience and it will not suit everyone. This can actually be one of the main benefits of running a home-based business too. You are able to get your work done without the inevitable disruptions that a noisy office normally has. If you are happy with your own company and do not need to be surrounded by other people, starting a home business could be the answer to your prayers.

To be able to work at home with any degree of effectiveness, you must have high levels of self-motivation. Of course, running your own home-based business is going to be a strong motivator in itself because you are directly responsible for how much money you make. If you do not put all your efforts into your small business, it is not going to make the profits that you want to be able to enjoy.

The harder you work on finding business opportunities and methods of making money online, the more successful your home business is likely to be. It is also important to be organized when you work at home. Any small business requires records to be kept but you do need to be especially careful when are running a home-based business that paperwork doesn’t go astray.

Remember, when you are thinking about starting a home business, that you are going to be the boss. You may have dreamed of being able to get away from your employer and being able to work at home, but are you really ready for it? If you have worked for an employer for a long period of time you may not realize what is required to run a small business, especially a home-based business. You need to be able to work on your own initiative, deal with every issue involved in your home business and, most importantly, not give up when the going gets tough.

Of course, the benefits of being able to work at home far outweigh the negative aspects or people wouldn’t be running home-based businesses. You can set your own hours and work around family commitments and holidays. If you need to take time off, you can, as it is your home business and you do not need anyone else’s permission!

If you are thinking about starting a home business, it is important to weigh all the options. There are plenty of business opportunities that you can take advantage of to make money online or you may want to have a home-based business that sells a product or service. Whatever you decide to do, with hard work and determination, your home based business will be a success.