Company Information Name Company Structure C-Corp S: Fill & Download for Free

It's a corporation.The reason for that "C" is so that it's not confused with "S" corporation - they differ in ways of tax treatment in US.Below is the comparison for your reference, but for further guidance you are better off retaining a tax professional:S Corporation vs. C CorporationThe C corporation is the standard corporation, while the S corporation has elected a special tax status with the IRS. It gets its name because it is defined in Subchapter S of the Internal Revenue Code. To elect S corporation status when forming a corporation, Form 2553 must be filed with the IRS and all S corporation guidelines met. But C corporations and S corporations share many qualities:Limited liability protection. Both offer limited liability protection, so shareholders (owners) are typically not personally responsible for business debts and liabilities.Separate entities. Both the S corp and C corp are separate legal entities created by a state filing.Filing documents. Formation documents must be filed with the state. These documents, typically called the Articles of Incorporation or Certificate of Incorporation, are the same for both C and S corporations.Structure. Both have shareholders, directors and officers. Shareholders are the owners of the company and elect the board of directors, who in turn oversee and direct corporation affairs and decision-making but are not responsible for day-to-day operations. The directors elect the officers to manage daily business affairs.Corporate formalities. Both are required to follow the same internal and external corporate formalities and obligations, such as adopting bylaws, issuing stock, holding shareholder and director meetings, filing annual reports, and paying annual fees.S corporation vs. C corporation: The differencesDespite their many similarities, S corporations and C corporations also have distinct differences.Taxation. Taxation is often considered the most significant difference for small business owners when evaluating S corporations vs. C corporations.C corporations. C corps are separately taxable entities. They file a corporate tax return (Form 1120) and pay taxes at the corporate level. They also face the possibility of double taxation if corporate income is distributed to business owners as dividends, which are considered personal income. Tax on corporate income is paid first at the corporate level and again at the individual level on dividends.S corporations. S corps are pass-through tax entities. They file an informational federal return (Form 1120S), but no income tax is paid at the corporate level. The profits/losses of the business are instead “passed-through” the business and reported on the owners’ personal tax returns. Any tax due is paid at the individual level by the owners.Personal Income Taxes. With both types of corporations, personal income tax is due both on any salary drawn from the corporation and from any dividends received from the corporation.Corporate ownership. C corporations have no restrictions on ownership, but S corporations do. S corps are restricted to no more than 100 shareholders, and shareholders must be US citizens/residents. S corporations cannot be owned by C corporations, other S corporations, LLCs, partnerships or many trusts. Also, S corporations can have only one class of stock (disregarding voting rights), while C corporations can have multiple classes. C corporations therefore provide a little more flexibility when starting a business if you plan to grow, expand the ownership or sell your corporation.S corporation (S corp) electionTo become an S corporation, you must file Form 2553 with the IRS. The IRS instructions—which can be a bit tough to follow—require that an election is considered effective in the current tax year only if the Form 2553 is completed and filed:Any time before the 16th day of the 3rd month (for calendar year tax payers, this means it needs to happen by March 15th)Any time during the preceding tax year (however, an election made no later than 2 months and 15 days after the beginning of a tax year that is less than 2½ months long is treated as timely for that year).Generally, an election made after the 15th day of the 3rd month but before the end of the tax year is effective for the next tax year (unless you can show failure to file on time was due to reasonable cause).Keep in mind that some states also require you to file a state-level S corporation election after incorporating your business.

A consultation with a lawyer can help you determine what legal actions you need to take. There are lots of important ways that a lawyer can help your startup in its early stages, and it is much cheaper and more time-efficient to get things done by a lawyer correctly the first time, rather than fixing mistakes later or forgetting to take care of legal matters entirely. Also, keep in mind that your startup is unique and, without all the relevant information, it is difficult to determine precisely what legal tasks you’ll need to complete. Listed below are a few general things to consider, but a specialized startup lawyer can help you pinpoint and prioritize the legal tasks that would benefit your startup.Incorporation - Legally forming your business means everything from consulting with a lawyer to choose the right business structure (LLC, S-Corp., C-Corp., etc.) to correctly filing the necessary paperwork. Using a lawyer for incorporation will ensure that you’ve filed correctly the first time. This is especially important if you plan on seeking investors at some point - they’ll want to make sure your company has all its legal paperwork in order before seriously considering an investment. Many startups avoid organizing as an LLC -- oftentimes a corporate structure is more beneficial, but a lawyer can talk you through the pros and cons of each structure.Intellectual Property - Your startup, especially since it is based online, should start protecting its intellectual property ASAP. This includes filing for patents, registering trademarks, dealing with infringement, navigating IP licenses, and spelling out who owns what (among co-founders, for instance). You will likely want to trademark your business's name and/or logo -- and depending on how you're using content, it might make sense to formally register a copyright. You might also be able to apply for a patent or a provisional patent, but you should discuss with a lawyer.Online Issues, Including Privacy Policies, Terms of Use Agreements, Etc. -- Most websites need privacy policies and terms of use agreements explaining to users how your company will be collecting, storing, and using user data from the site, as well as to spell out the agreement between you and users. It is worth hiring a lawyer to draft these documents, since users can bring lawsuits against your company if you misuse their personal or payment information, among many, many other things. You’ll want to put these agreements in place before your site launches to make sure you’re covered from day one. A lawyer will walk through your site with you, so they understand exactly what you're doing, so your privacy policies and terms of use/service are tailored for you.Consider a free half-hour consultation with a lawyer to understand what steps you'll need to take and approximately how much those things will cost through my startup, Priori Legal. Priori is a curated legal marketplace that connects startups and SMBs with a network of vetted lawyers. Our lawyers specialize in all types of startup law, from incorporation to raising capital to intellectual property, and we extensively vet lawyer applicants. Only about 20% of lawyer applicants are admitted to our site after a rigorous application, interview, and reference check. Our lawyers offer special hourly rates and exclusive flat fee packages for clients through the site, so you’ll get a great deal in addition to a great lawyer.

An LLC is the most flexible type of business entity and I would recommend it for most business purposes, including this one.You certainly should consider forming some kind of formalized business entity in which you will hold title to properties you will rent out. This entity is a separate legal entity from yourself for all purposes other than taxation. A sole-member LLC, assuming you are the sole member, since the question doesn’t indicate otherwise, will be considered a “disregarded entity” for tax purposes, which means you would carry over any gains or losses to your own individual tax returns.You get the benefit of limitation from liability, as long as you maintain the entity as a separate being from yourself. That means don’t intermingle your own money and the business money. You will likely have to personally “co-sign” or guarantee the first few loans/lines you open, but that does not ruin the separation. What does ruin it would be taking money out of the business account randomly or using business assets for personal reasons, etc. This separation is important. If a tenant or creditor tries to come after you personally for any reason, they will not be able to get to your personal assets (unless it’s something you did also personally co-sign for or guarantee), for example.A downside of this is that the entity itself is just that - an entity. It is separated legally from you as an entity yourself. In California (and most other states) you cannot represent another entity unless you have a license to practice law. That includes a business you own. If you want to evict a tenant, you would need to have an attorney do it. You could technically do it yourself, and many do and get away with it, but if the tenant fights back, your case will likely be thrown out for UPL (unauthorized practice of law). One of the costliest parts of being a landlord is that down time, I know from experience, and having your case thrown out and having to start all over is the most costly part, as it resets many clocks, gives them another chance for yet another continuance, where they get to continue to stay and do potentially more damage (most tenants, at least in my experience, do not have much in the way of other assets you could attach in a damages claim, so exit damage by an angry tenant is a frequent issue I help folks with).You could form a Corporation, which would also give you limitations on liability, but I cannot discern any advantage for you. You face double taxation (as earned and then as distributed to you) for a C Corp, or just more difficulty in the setup and maintenance with an S Corp, even though the S Corp is considered a pass-through, so it does not pay at the federal level but does pay a 1.5% California state tax vs the 8.84% C Corp state tax rate on the distributions—the S Corp is better, but still much more convoluted than an LLC. A Corporation would allow you to go public or issue stock, but unless you’re going to become some kind of REIT, I doubt that’s what you plan to do. And best of all, it only costs $70 to file your articles with the secretary of state of California, usually just takes a day or two to get confirmed as long as there is no issue with the name, and the second you get that from the Secretary of State, you can go on to the federal IRS website and get your federal EIN in about 30 seconds, and you can take all that paperwork to a bank and open a business account—-viola. Open for business.You will have to pay a franchise tax of $800 annually regardless of your entity choice type, with some limited exceptions such as being active military and deployed during that year if you operate at a loss for the year, and a few other limited exceptions. I mention this only because I have no other information about your situation.Make sure you own the title to the property in the name of the business, not you as an individual, including any insurance policies. I constantly have to remind my realtor and other team folks that documents, titles, policies, and bills, need to be in the name of the entity LLC, not me as an individual, and I am signing as the managing member, not as me the individual. Do not deposit tenant money into your personal account ever.I would suggest that if you have any other details or specific circumstances related to your ownership of this property, you take them to a local attorney. It can surprise some folks at what matters in the formation of the business entity - including the type of funds being used, like if they’re from your 401k, if you’re married/have children or not, if anyone will help you run/own/manage the business or not, what you do for a living, what kinds of assets you have and if you have a will, how it’s structured. These things can all impact the specifics of how you construct your business entity and how you hold title to the property/ies you own.