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C Corporation refers to any corporation that, under United States federal income tax law, is taxed separately from its owners. A C corporation is distinguished from an S corporation, which generally is not taxed separately. Most major companies (and many smaller companies) are treated as C corporations for U.S. federal income tax purposes.
An S corporation, for United States federal income tax purposes, is a corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. In general, S corporations do not pay any federal income taxes. Instead, the corporation's income or losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.
The Limited Liability Partnership (LLP) is essentially a general partnership in form, with one important difference. Unlike a general partnership, in which individual partners are liable for the partnership's debts and obligations, an LLP provides each of its individual partners protection against personal liability for certain partnership liabilities.
The limited liability company (LLC) is a hybrid legal entity that has both the characteristics of a corporation and of a partnership. An LLC provides its owners with corporate-like protection against personal liability. It is, however, usually treated as a noncorporate business organization for tax purposes.
A nonprofit organization (NPO) is an organization that uses surplus revenues to achieve its goals rather than distributing them as profit or dividends. States in the United States defer to the IRS designation conferred under United States Internal Revenue Code Section 501(c), when the IRS deems an organization eligible.
Professional corporations (abbreviated as PC or P.C.) are those corporate entities for which many corporation statutes make special provision, regulating the use of the corporate form by licensed professionals such as attorneys, architects, engineers, public accountants and physicians. Legal regulations applying to professional corporations typically differ in important ways from those applying to other corporations. Professional corporations, which may have a single director or multiple directors, do not usually afford that person or persons the same degree of limitation of liability as ordinary business corporations (cf. LLP). Such corporations must identify themselves as professional corporations by including "PC" or "P.C." after the firm's name. Professional corporations often exist as part of a larger, more complicated, legal entity; for example, a law firm or practice might be organized as a partnership of several or many professional corporations.
A limited liability company expressly organized for the purpose of engaging in a learned profession such as law, medicine or architecture. Professional llcs must file Articles of Organization with the state which meet the state's requirements for professional companies (not all states have this designation).
The phrase "doing business as" (abbreviated DBA, dba or d/b/a) is a legal term used in the United States, meaning that the trade name, or fictitious business name, under which the business or operation is conducted and presented to the world is not the legal name of the legal person (or persons) who actually own it and are responsible for it. In other countries the expressions operating as (abbreviated o/a) or trading as (abbreviated T/A) are used for a similar purpose. The desired name might not have been registrable, or the business might be owned by another company, franchisee, or a sole proprietorship, resulting in all legally binding transactions taking place on behalf of the trading as name.
It is very important to maintain proper records to assure limited liability to corporate shareholders. The corporation should have a record book which contains a copy of the articles of incorporation, bylaws, initial and subsequent minutes of directors and shareholders meetings and stock register (or ledger).
An Employer Identification Number (EIN) is used to identify a business for tax purposes with the Internal Revenue Service (IRS). An EIN or FEIN, also referred to as a Tax Identification Number (TIN), is similar to a social security number for your business. Every business, except for certain sole proprietorships that do not have any employees, should have a federal employer identification number (FEIN). Certain nonprofit organizations for example: churches, clubs, etc., trusts, and estates must also have an EIN.
A business is required to obtain a Federal Employer ID Number if it hires employees or meets other IRS guidelines. In addition, banks usually require businesses to obtain an Employer ID Number prior to opening a business bank account.
Sales tax is imposed on all retail sales, leases and rentals of most goods, as well as taxable services. In other words a sales tax is a tax on the end-purchase of a good, so it normally does not apply if a sale is for re-sale or for subsequent processing. Sales tax normally a certain percentage that is added onto the price of a good or service that is purchased.
Your sales tax responsibilities as a new business owner, whether you start a business or buy an existing business, will vary depending on the type of organization or entity you operate. Besides state level, estimation of sales tax is also done on municipal or county levels. Payment of state sales tax depends on your sales and your state's regulations.
Normally it is the consumers who are burdened with sales tax. The re-sellers on the other hand, are exempted from sales tax, provided they do not use the goods on which sales tax is levied.