Starting a business has it fair share of challenges. For corporations, there are numerous documents that have to be prepared, which include the articles of incorporation, bylaws, stock certificate, shareholders agreement, and organizational meeting minutes. Additionally, Corporations need and are required to keep a corporate record book and perform annual organizational meeting minutes to maintain good status with the Secretary of State’s office. The maintenance of annual minutes that establish the leadership structure and create limited liability protection. Two different types of corporations can be formed , which include a S and C Corporation. A S Corporation is designed to be for small businesses, as the corporation is not taxed, as the income flows out to the shareholders. This referred to as “pass through status”. This structure is best for small businesses, but can cause problems for individuals who want to continually grow their business. For example, there can’t be greater than one hundred shareholders, and can issue only one class of stock. A C Corporation is where the owners/shareholders and the corporation itself are taxed, creating a double taxation situation. C-Corp’s tend to be used by bigger corporations, I.E. the McDonald’s and Starbucks of the world, and is not one we usually form due to the Double Taxation issue faced by individuals and the corporations in these situations.
The most flexible type of business is a Limited Liability Companies. For LLC’s, a certificate of formation need to be filed with New Hampshire’s Secretary of State. Also, a registered agent is required in order for your formation to be processed. Although it is not required, a operating agreement should also be created in order to create the foundations of your business. Some other things that you should do while forming your LLC business include creating an Employment Identification Number, establish a business checking account, and choosing a business name. LLC’s help businesses face little liability for their actions as a corporation, the profits go directly to the members without being taxed by the IRS, and it allows for flexibility in management. The disadvantages to an LLC are it doesn’t protect the members personal assets, and the members of the company will be subject to the self employment tax.
At McSwiney & Wood Law Firm P.C., we have nearly thirty years of helping local business get formed and running. This includes many local businesses in the New London and the Dartmouth-Lake Sunapee region. Our experience ranges from creating start-up ventures, small companies to large international corporations, closely and publicly held corporations, nonprofit corporations, professional corporations, financial institutions and others across the state of New Hampshire. The variety of experiences we’ve had with businneses across our community will help you create the company of your dreams.
Want to form a business with us? Send an email either to mlw@mcswineylaw.com, krs@mcswineylaw.com, or imw@mcswineylaw.com, or give us a call at 603-526-6955 and speak to Karen Shaughnessy to schedule an appointment. We look forward to hearing from you!
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