Whether you have just started a new business or you are currently running a successful company, you may be looking at how you can take your venture to the next level. Both joint ventures and business mergers can help enhance the power of a company. Although these business methods sound similar, they differ in several ways. It is important to understand the difference and similarities of these business methods so that you can choose the one that fits best for your situation.
When you own an Illinois or Michigan small business, you assume a certain amount of risk, but the amount of personal liability you take on will depend on the type of business structure you choose to create. At Pentiuk, Couvreur & Kobiljak, P.C., we understand that the business type you choose will have a direct impact on whether others can hold you personally liable, should someone sue or file a judgment against your company. We have helped many entrepreneurs with similar concerns select business formation types that meet their needs.
Company owners and shareholders in Michigan and Illinois are often busy at the beginning of the year preparing for the year ahead. This year, they are also likely focused on navigating how the full implementation of the Tax Cuts and Jobs Act will impact them.
A sub S corporation, or subchapter S corporation, is a special type of corporation that provides the security of LLCs but allows profits and losses to flow directly through to shareholders. This means that income and losses accrued by the corporation may pass through to the shareholders so that they may include them on their individual tax returns. This eliminates the need for the company to pay federal taxes. Though this type of business entity is more appealing to small business owners than a standard corporation, you should weigh the pros and cons of this type of entity before structuring your Illinois- or Michigan-based business around it.
Entrepreneurs in Illinois and Michigan must choose how they would like new ventures to be managed and how they prefer their businesses to be taxed. A company may be established as a sole proprietorship, a partnership, a corporation or a limited liability company. Each framework has its own sets of pros and cons, so people should review each one carefully.
Businesses of varying sizes and across any industry in Chicago or Detroit may at some point entertain the idea of merging with another company. They may also eye the possibility of an outright purchase of another company in an acquisition. These transactions may be very beneficial to an organization and even allow it to compete better in a changing marketplace. Certainly, there are many financial issues to contend with when navigating a merger or acquisition but this is not the only element that contributes to the ultimate success of these deals.
Business owners in and around Chicago or Detroit know that they have to watch their bottom line and many things go into this. Taxes are one of the factors that can make a big difference to a company's profitability and vice versa. In light of the new tax law that went into effect this year, some companies might be looking at making some changes to take maximum advantage of the law or to avoid paying even more tax.
Company executives in Michigan and Illinois who have worked for private companies but now may be looking to switch employment to a public company or who may work for a company looking to go public will quickly learn that a very different set of oversight is involved for publicly traded companies. There are many advantages for a business to becoming public including the infusion of cash into the business that happens with an initial public offering. But, executive staff must be educated about their responsibilities and understanding Sarbanes Oxley is a good place to start.
Entrepreneurs who are looking to start a new business always need to choose an operational stucture. In so doing, they also choose a corresponding tax model and when it comes to C and S corporations, the tax model can vary greatly. Many companies elect to use the S corporation structure in large part due to the tax advantages they enjoy compared to with a C corporation. However, with the new tax code in place, many companies may be re-evaluating this decision.
For many Chicago and Detroit residents who have taken the plunge, there is no better feeling than starting a new business. As thrilling as a new start-up can be, there are often an equal amount of stressors. One of those speed bumps involves the initial stages of the process. The following information goes over some of those common challenges, and what new business owners can do to avoid them.