“Double taxation” refers to the two “levels” of tax that are assessed by the IRS on profits earned by C Corporations–a “C Corporation” simply refers to a corporation that is taxed according to subchapter “C” of the US Tax Code–or other entities that elect to be taxed as C Corporations. The first level of taxation is at the corporate level; these taxes are assessed on the corporation’s profits before the company distributes any dividends to shareholders. The second level of taxation applies at the individual level when the corporation distributes dividends to individual shareholders.

How to Avoid Double Taxation

Entities that elect to be taxed as C Corporations (or are taxed a C Corporations by default) are subject to double taxation. Businesses…

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While it is a simple little box to check on the Washington Secretary of State website, with it comes important ramifications. What I’m referring to is the box that asks whether the members will govern your LLC, or if a manager will be designated. The answer to this question can drastically change the outcome of litigation, performance and enforcement of contracts, and the day to day operations of your LLC.

Members of a LLC are like shareholders of a corporation. They typically own an equity interest in the company, have voting rights and, in the case of member-managed LLC’s, manage the affairs of a corporation. A manager of a LLC, on the other hand, does not have to own equity in the company and acts more like an…

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When you’re preparing to start a new business, it is important to understand the various legal entities that you can operate the business as. Depending on the type of entity that you organize your business as, you may be personally liable for the business’ debts. You may also have to report the business’ income on your own individual tax return. There’s no mathematical formula for sorting out the right entity for your small business, but there are some general characteristics of each entity that may help guide your choice.

Over the course of the next few weeks, inVigor Law Group is publishing a series on choosing the right entity. The series will provide you with helpful information about sole proprietorships, partnerships,…

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The Wall Street Journal recently published an article that discusses the outdated notion of “small business” in the U.S. The disconnect between small business policies and small business realities is making it so the benefits that were engineered specifically for “small businesses” don’t reach a large majority of the small business population. Here are some of the highlights from the article.

Outdated Programs Don’t Help Modern Startups
The Small Business Administration was created in 1953, a time when dynamic startups (such as Facebook) did not exist. It wasn’t until the 1990s that the boom of software and internet-based startups changed the small business landscape. Because the SBA did not contemplate this changing landscape, many of its programs are not tailored to meet…

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