a. Entities in general

In the U.S. we have the following business entity types:

  • Sole Proprietorship
  • Partnership (GP, LP, LLP, LLC)
  • Corporations (S or C)

Businesses are not operated using a Trust (but a trust can own some businesses).

Read the following EXCELLENT primers on business entity types. Your understanding of the general differences between these entity types will make your business dealings simpler.

Here’s a general overview of each entity type:

http://www.fclaw.com/article/materials/ChoosingtheAppropriateBusinessEntity.pdf

This is a great comparison table:

http://www.bizfilings.com/comparison.aspx

5 Responses to “a. Entities in general”

  1. Rafael Says:
    02/18/2010 at 6:16 AM | Reply

    For LLC’s or partnerships are there requirements of who can be a member? Can foreign nationals be members of an LLC? If so, is there any restrictions in terms of ownership of said entity?

  2. abcpa Says:
    02/19/2010 at 11:14 PM | Reply

    There are not the same restrictions on LLC for ownership as we see for S corps and corps. Foreign owners are allowed, but certain withholdings might be required on income and/or distributions, depending on the status. Foreign ownership will simply require disclosure, but it is not precluded.

    • Scott Says:
      03/21/2010 at 12:42 AM | Reply

      can all the members of a newly formed LLC or corps be foreign? or is it necessary that a certain percentage of the members be US citizens? would this be treated any differently by financial institutions even if they have equity in banks?

  3. abcpa Says:
    03/23/2010 at 1:43 AM | Reply

    from a tax perspective the foreign owners will mean more disclosures and possible income tax withholdings on profits or distributions. But the issue of foreign owners might cross legal boundaries of which I am unsure. Someone will need a US ID associate with the entity i believe…we need to ask an attorney that question though.

    I don’t believe the banks will look on this structure differently…but again, more disclosure will be required at all levels with foreign ownership.

  4. Mark da Cunha Says:
    01/30/2011 at 6:16 PM | Reply

    If I’m not currently in the position to create a business entity yet but I would like to create a business “identity” so that I can start creating a business brand, how would I go about doing that? For instance, I am currently working at an architecture firm so all of my income will be W-2 but I want to “lock-up” or “register” a business name so that I may use it in the future. How would I be able to find out if I can use that name and secure it? In order to “lock-up” do I have to establish a Sole Proprietorship now even though it will not receive any income? And, will I be able to take that business name/identity to another city or state when I move out of San Diego?

Leave a comment