Incorporation Lawyer and LLC Attorney Indianapolis
As a business formation and incorporation lawyer, I help clients determine the best entity for their needs. Indiana allows a number of business entity choices, including;
- Corporations. Corporations are owned by one or more shareholders, and their operations are managed by officers and overseen by a board of directors. A corporation may have the same person in all of these roles, or it may have entirely different people in each role. A corporation can be what is known as a “C” corporation – this means that the corporation is taxed on profits and losses, or a “subchapter S” corporation, in which the owners are allocated a portion of the profits and losses based upon their share ownership, which are then taxed at the personal level of the shareholders.Other than the taxation difference, “C” and subchapter “S” corporations are exactly the same for legal and operational purposes. There are, however, certain restrictions on ownership of subchapter S corporations (for example, a subchapter S corporation cannot be owned in whole or in part by a non-U.S. citizens or residents, or a corporation, and if a subchapter S corporation subsequently becomes owned in part by one of these prohibited shareholders, it will convert to a C corporation for tax purposes).
- Limited Liability Companies. Limited liability companies have become popular as investment vehicles, and are often used in real estate matters and as vehicles for partnerships. Most limited liability companies are taxed at the owner level (the same as with subchapter S corporations).
- Limited and General Partnerships. Like limited liability companies, limited and general partnerships have flexibility for different distributions of income and related tax consequences. In general, limited liability companies have replaced many of the forms that otherwise would have been limited or general partnerships. If two or more people start a business together and they do not otherwise form the business under a specific entity choice, under the law they will have formed a general partnership.
- Sole Proprietorship. A sole proprietorship exists when a single person forms a business without choosing to have the business incorporated or formed as an LLC. All of the income and losses of the sole proprietorship are reported on the owner’s tax returns under Schedule C. A benefit of sole proprietorship is that the owner does not have to file business formation documents, hold meetings, or otherwise observe corporate formalities; a significant disadvantage is that the individual owner will have unlimited personal liability arising from business operations. As a result, most business owners will be better protected by choosing to form a corporation or LLC.
- Other entity choices. There are a number of other entity choices for businesses in Indiana that are similar to the ones noted above for certain professions, such as a “Professional Corporation” (or P.C.).
What Business Entity Form will be the Best for Your Business?
The right entity for your business should take into account factors such as tax matters, whether you will have employees (and if so, about how many), how many owners there will be, and if you intend on selling equity interests (such as shares) in the future. Once I know the answers to these and other matters, I can provide you with additional guidance concerning the best entity choice for your business.
Please Call Me to Schedule an Appointment and to Get Started
I would look forward to having the opportunity to meet you and learn about your business.