Cover image for Small business formation handbook
Small business formation handbook
Cooke, Robert A., 1931-
Personal Author:
Publication Information:
New York : John Wiley, [1999]

Physical Description:
x, 245 pages ; 28 cm
General Note:
Includes index.
Format :


Call Number
Material Type
Home Location
Item Holds
KF1659 .C66 1999 Adult Non-Fiction Open Shelf
KF1659 .C66 1999 Adult Non-Fiction Oversize

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A Complete Guide to Formations for the New Business Owner This comprehensive handbook describes the different types of business formations (sole proprietorships, partnerships, C corporations, S corporations, and limited liability companies), including the advantages and drawbacks of each, to help new small business owners make well-informed decisions. The first part of the book covers all the various legal business formations, with specific headings designed to help you eliminate the types of formations you cannot or should not use. Each type of formation includes examples of tax consequences as well as liability scenarios. The second part is dedicated to the forms you will need and the procedures you should follow to make your business run smoothly, in addition to the steps you should take to protect yourself from incurring penalties from various government agencies--state, local, and federal (most notably the IRS). You'll find samples of all the necessary business and legal forms, including articles of incorporation, stockholder agreements, relevant IRS forms, and other government forms. Whether you're just setting up a business or you're already up and running and need to pinpoint the details you may have missed, the Small Business Formation Handbook puts all the answers you need right at your fingertips.

Author Notes

Robert A. Cooke, CPA, has had twenty-five years of experience in public accounting. Prior to becoming a CPA, he was the owner and co-owner of three successful small businesses. He has taught numerous seminars on finance and accounting for Pryor Resources, Inc., and is the author of several books, including Doing Business Tax-Free and How to Start Your Own (Subchapter) S Corporation, also published by Wiley.

Table of Contents

Part I The Choices--Descriptions of Types of Business Forms
Chapter 1 Sole Proprietorshipp. 3
Ownershipp. 3
Liability for Debts of the Businessp. 3
Amount of Investmentp. 4
What Can Be Invested in the Businessp. 4
Future Size of the Businessp. 5
Managementp. 5
Employee Ownership of Part of Businessp. 5
Sale of All or Part of the Businessp. 5
Location of Businessp. 5
Geographic Area of Operationsp. 6
Income Tax Statusp. 6
Self-Employment Taxes (e.g., Social Security or FICA and HI Tax)p. 6
Other Taxes and Feesp. 7
Fringe Benefitsp. 7
Estate Planning Considerationsp. 8
Complexity, in Generalp. 9
Chapter 2 General Partnershipsp. 10
Ownershipp. 10
Liability of Owners for Debts of the Businessp. 10
Amount of Investmentp. 11
What Can Be Investedp. 11
Future Size of the Businessp. 11
Management of the Businessp. 11
Employee Ownership of Part of the Businessp. 12
Sale of All or Part of the Businessp. 12
Locationp. 12
Geographic Area of Operationsp. 12
Income Tax Considerationsp. 13
Other Taxes and Feesp. 15
Fringe Benefitsp. 15
Estate Planning Considerationsp. 15
Ease of Dissolutionp. 15
Complexity, in Generalp. 15
Chapter 3 Limited Partnershipsp. 17
Ownershipp. 17
Liability for Debts of Businessp. 17
Managementp. 17
Securities Regulationsp. 18
Chapter 4 C Corporationsp. 19
Ownershipp. 19
Liability for Debts of Businessp. 20
Amount of Investmentp. 20
Type of Investmentp. 20
Future Size of Businessp. 20
Managementp. 20
Employee Ownership of Part of Businessp. 21
Sale of All or Part of Businessp. 21
Location of Businessp. 21
Geographic Area of Operationsp. 21
Income Tax Considerationsp. 21
Other Taxes and Feesp. 23
Securities Regulationsp. 23
Fringe Benefitsp. 23
Estate Planning Considerationsp. 24
Ease of Dissolutionp. 24
Complexity, in Generalp. 24
Chapter 5 S Corporationsp. 25
Ownershipp. 25
Classes of Stockp. 25
Future Size of Businessp. 25
Employee Ownership of Part of Businessp. 26
Geographic Area of Operationsp. 26
Income Tax Considerationsp. 26
Fringe Benefitsp. 26
Estate Planning Considerationsp. 26
Ease of Dissolutionp. 27
Complexity, in Generalp. 27
Chapter 6 Limited Liability Companyp. 28
Ownershipp. 29
Liability for Debts of Businessp. 29
Amount and Type of Investmentp. 29
Future Size of Businessp. 29
Managementp. 30
Employee Ownership of Part of Businessp. 30
Sale of All or Part of Businessp. 30
Location of Businessp. 30
Geographic Area of Operationsp. 30
Income Tax Considerationsp. 30
Other Taxes and Feesp. 31
Securities Regulationsp. 31
Fringe Benefitsp. 31
Estate Planning Considerationsp. 31
Ease of Dissolutionp. 31
Complexity, in Generalp. 31
Part II Setting Up Your Business--The Forms and the Details
Chapter 7 Setting Up Your Business as a Sole Proprietorshipp. 35
Application for Employer Identification Number (IRS Form SS-4)p. 35
Registration with the State Tax Authoritiesp. 36
Local Business Licensep. 36
Registering Your Fictitious Namep. 36
Registering Your Business Name and Trademarkp. 37
Help from the U.S. Patent and Trademark Officep. 38
Buying a Going Businessp. 38
Asset Acquisition Statementp. 38
Comply with the Bulk Sales Lawp. 39
Other Income Tax Forms You Will or May Be Filingp. 39
Profit or Loss from Businessp. 39
Depreciation and Amortizationp. 40
Sales of Business Propertyp. 40
Expenses for Business Use of Your Homep. 40
Self-Employment Taxp. 40
Chapter 8 Setting Up Your Business as a Partnershipp. 80
Registering the Partnershipp. 80
Partnership Agreementp. 80
Income Tax Forms You Will Be Filingp. 81
Partnership Return of Incomep. 81
Limited Partnershipsp. 82
Chapter 9 Corporationsp. 126
Setting Up the Corporation and Making It Legalp. 126
Pre-Incorporation Agreementp. 126
Application for Reservation of Corporate Namep. 127
Articles of Incorporationp. 128
Acceptance of Appointment by Resident Agentp. 128
Keeping the Corporation Alivep. 129
Annual Reports to the Statep. 129
Apply to the IRS for the Corporation's Employer Identification Number (EIN)p. 129
More Tasks to Keep Your Corporation Alivep. 130
Corporate Bylawsp. 130
Minority Stockholdersp. 131
Stockholders' Agreementp. 132
More i's to Dotp. 132
Other Documents You May Need in the Initial Stages of Establishing Your Corporationp. 133
Section 1244 Clausesp. 133
Your Future Corporate Life (Legalities and Tax Filing)p. 134
Annual Stockholders' Meetingp. 134
Annual Board of Directors' Meetingsp. 134
Annual Income Tax Returns (Corporations)p. 135
S Corporationp. 136
Meet the Qualifications for S Corporation Statusp. 136
Action by the Board of Directorsp. 137
Action by the Stockholdersp. 137
Make a Timely Application to the IRSp. 137
Minority Stockholder Protectionp. 138
Annual Income Tax Returns (S Corporations)p. 138
Chapter 10 Limited Liability Companies (LLCs)p. 212
Initial Forms That Start Your Limited Liability Companyp. 212
Reservation of an LLC Namep. 213
Articles of Organizationp. 213
Annual Reportsp. 213
Operating Agreement of an LLCp. 213
LLCs and the Securities Lawsp. 214
Income Tax Status and Forms, LLCp. 214
Multimember LLCsp. 215
Single-Member LLCsp. 215
The Check-the-Box Formp. 215
Other Forms an LLC Should Filep. 216
Records an LLC Should Keepp. 216
Limited Liability Partnership (LLP)p. 217
Appendixp. 239
Securities and Exchange Commission (SEC), Contact Informationp. 239
Addresses of Secretary of State Business Sectionsp. 239
Indexp. 243