Feb 2010 - Michigan South Asian

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Michigan South Asian February 2010 Page 20The Basics of Business FormationBy Farah Ahmed, The Law Officesof Farah AhmedIf you are considering startingyour own business, one of thefirst decisions that you need tomake as a business owner ishow the business entity shouldbe structured. In deciding on theright business entity, you musttake several factors into considerationsince your ultimatedecision can have an impact onmultiple aspects of your business,including the payment oftaxes, your personal liability forthe debts of the business, ownershipsuccession, and the ease ofmanagement of the business. Inmaking this important decision,the following concerns must betaken into account:1. Your intended size andnature of the business.2. The level of controlyou wish to have in your business.3. Whether or not you willbe sole owner of the business.4. Your need for accessto cash out of the business foryourself.5. The level of personal liabilityyou wish to take on asthe owner of the business.6. The tax implicationsof the different business entities.7. Whether or not youwill need or intent to reinvestbusiness earnings into thebusiness.Sole ProprietorshipThe vast majority of smallbusinesses begin as sole proprietorships.These businessesare owned by one individual,usually the person who hasresponsibility of running thebusiness day-to-day. Sole proprietorsown all of the assetsand profits of the business,but also assume completeresponsibility for its liabilitiesand debts. Consequently, interms of the law, the businessowner is one and the samewith the actual business.Therefore, while sole proprietorshipsmay be the easiestand least expensive businessstructure in terms of creation,taxation and dissolution, soleproprietors take on unlimitedliability and are legally responsiblefor all debts againstthe business. Furthermore,sole proprietors often are at adisadvantage in raising fundsfor the business and oftentimes, are limited to using personalfunds or consumer loansto add capital to the business.CorporationOne option that intendedbusiness owners may have tolimit their personal liabilityand increase their ability toraise funds is to incorporatethe business as a corporation.A corporation is considered bylaw to be a unique, separateentity, apart from its owner(s).Consequently, a corporationcan enter into contractualagreements, can be sued orand can be taxed separate fromits owner(s). The owners of acorporation are its shareholders,and may elect a board ofdirectors to oversee the businessdecisions and/or managersto run the business day-to-day.Additionally, corporations canraise needed funds through thesale of their stock. In additionto these advantages, corporationstatus also comes withseveral disadvantages, such asthe need for increased time andmoney creation, increased stateand federal regulations andincreased overall taxation, dueto what is known as “doubletaxation.” Double taxation iswhen the corporation is firsttaxed for its profits and theshareholders are then taxedfor any dividends paid to themfrom the corporation.However, the Subchapter C taxelection enables the corporation’searnings and/or profits tobe treated as distributions andtherefore, pass through directlyto the personal tax returns ofthe shareholders. It is importantto note however, that thereare certain requirements thatmust be met for a corporationto be able to elect Chapter Cstatus and the assistance of aqualified attorney is helpful inascertaining this eligibility.Limited Liability CompanyThe LLC is another option forto-be business owners. TheLLC is a relatively new hybridbusiness structure in Texasand is designed to providethe limited liability featuresof a corporation and the taxefficiencies and operationalflexibility of a partnership orsole proprietorship. Finally,GPs (General Partnerships),LPs (Limited Partnerships)and LLPs (Limited LiabilityPartnerships) are also availableif an intended business ownerwants to avail himself/herselfto the advantages and disadvantagesof the partnershipstructure.In summary, deciding on theform of business structure thatbest suits your business needsshould be given careful consideration.It is recommended thatyou consult a qualified attorneyin order to help you select thebusiness entity that is rightfor you, as the decision willinevitably have long-term andwide-ranging implications. Theabove is a very basic outlineof the available options forbusiness structures and shouldnot be relied upon in place of aqualified attorney’s advice.For a free consultation with AttorneyFarah Ahmed, The LawOffices of Farah AhmedMARKETINGEXECUTIVESCan you TALK & SELL.We are looking for you.Work from home.Flexible HoursEmail Resume:info@palepages.com
Page 21 February 2010 Michigan South AsianCHECK YOUR SIGNBy Pandit ParasharARIES (March 21 to April20): You will make good useof extra time onhands. You willhave several reasonsto celebrate.People willappreciate yourhospitality. Uncertainty aboutwork will start to fade awayand the new associate will bevery compatible. You may alsoreplace one of your vehicleswith newer model. Spousewill be full of great ideas andmotivate you.TAURUS (April 21 to May20): You will entertain fewguests at yourplace thismonth. It isgoing to bebeneficial as faras the moneyis concerned. It will be betterto dispose off money makingstocks and wait for few weeksto buy them back. You maynot get the credit for hard workright away but won’t have towait long. You will call an oldfriend for little advice.GEMINI (May 21 to June20): Concentration of planetsin fifth shouldgive the muchneeded boost.New doorswill open and adream job couldbecome reality. You will bemaking several very calculatedmove and see results quickly.Things will start moving inright direction in career. Youmay finally get rid of peoplecreating troubles in the past.You will invite few people atyour place.CANCER (June 21 to July 22):Planets will make you very soberand discreet.You will acceptthe challengeand work ona almost foolproof strategy.You may also let go a relationshipnot working out so welllately, and focus on real issuesin life. Keep a tab on caffeineor nicotine consumption. Youmay put off your plan to buya business because of lack offinances.LEO (July 23 to August 22):Changes will start to becomeclear and imminent.You willsuddenly put arein on expensesand ask familymember to follow. You mayconfide in someone close andtry to seek direction. Do notsign any legal papers in a hurryor will regret doing so soon.You may travel to a nearbytown to attend a dinner withfamily this month.VIRGO (August 23 to September22): Valueof your assetsand stocks willappreciate. Youmay be in marketto purchaseanother vehicle. You may invitefew business associates and animportant person at your place.Deal will be beneficial and lastfor long time. Some of youwill be slowly getting readyfor an upcoming trip. You maypay a visit to a holy place withfamily.LIBRA (September 23 to October22): Financially anotherrewarding time.Money can pour infrom all directions.New opportunitywill move you upto a different leveland bring long term gains. Youwill contribute with money ortime to a charity. Strong planetsgive you a commanding positionat work as well as in sociallife. You will hear few goodnews.SCORPIO (October 23 toNovember 22): Right eye maystart to givesome trouble oryou may need tochange previousprescription.Letter and mail you send outwill get the job done. You mayhave to opportunity to shareyour experience and wisdomwith others. Do not hold muchlonger and dispose off moneymaking stocks and just wait tillanother week to buy them backat cheaper price.SAGITTARIUS (November 23to December 22): You are veryclose to some majorimprovementsin career. Thingswill materializevery quickly.Someone whowas too close at one time willcall you. You will learn andbenefit from inferior competitors.Business will improve andyou will make new clients. Financiallythings will continueto be tricky but you will meetall commitments.CAPRICORN (December 22to January 19): You may findwhat you havebeen looking forfar away fromhome and maybeoverseas. Holyplanets will helpyou keep making the best andthe right choices. Positivechanges jus around the corner.Commitments made in the pastwill start to drain you out fromnow and on. You may startshopping for an upcoming animportant trip.AQUARIUS (January 20 toFebruary 18): Keep an eye on afemale colleaguewho’s been tryingto create troublebut be diplomatic.Mars will causebig improvementon financial front. You mayfinally pay off an old debt thismonth. There will be somechanges at work soon. Youmay go to see an old friendalso. You will find it slighteasier to convince others withyour plans.PISCES (February 19 to March20): It should be another moralboosting period.You will getquick results forthe efforts youmake. Boss willalso make necessaryrecommendation. You mayneed to go through some kindof legal process also. Partywill be entertaining and youwill make new friends. Spousemay complain about aches andpains in the body.FOR ORACLE FINANCIALTRAININGwww.appssys.com281-381-0744
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Feb 2010 - Michigan South Asian

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