BUSINESS STRUCTURES

1. BUSINESS STRUCTURES VIRGINIA ENTITIES -WHICH IS BEST FOR MY BUSINESS? MAY 22 2019

2. VIRGINIA BUSINESS ENTITIES SOLE PROPRIETORSHIP CORPORATION S CORPORATION LIMITED LIABILITY COMPANY PARTNERSHIP LIMITED LIABILITY PARTNERSHIP

3. SOLE PROPRIETORSHIP • SIMPLEST AND LEAST EXPENSIVE BUSINESS STRUCTURE • NO LIABILITY PROTECTION – INDIVIDUAL AND BUSINESS ARE THE SAME – PERSONALLY LIABLE FOR ALL BUSINESS DEBTS AND LIABILITIES • ALMOST NEVER RECOMMENDED DUE TO LACK OF PROTECTION

4. CORPORATION • KNOWN AS “C – CORPORATION” • FORMED BY FILING ARTICLES OF INCORPORATION WITH THE STATE CORPORATION COMMISSION • SUBJECT TO STRICT ORGANIZATIONAL AND OPERATING FORMALITIES • STOCKHOLDERS, DIRECTORS AND OFFICERS • LIABILITY PROTECTION • SEPARATE LEGAL ENTITY FROM ITS STOCKHOLDERS • TWO-TIERED TAXATION • CAN BE MORE COSTLY THAN ALTERNATIVES

5. S - CORPORATION • KNOWN AS “S – CORPS” • FORMED BY FILING ARTICLES OF INCORPORATION WITH THE STATE CORPORATION COMMISSION – • SAME AS C CORPORATION IN MOST RESPECTS • “PASS THROUGH” TAXATION • ELECTION UNDER SUBCHAPTER S INTERNAL REVENUE CODE • STOCKHOLDERS, DIRECTORS AND OFFICERS • LIABILITY PROTECTION • SEPARATE LEGAL ENTITY FROM ITS STOCKHOLDERS

6. LIMITED LIABILITY COMPANY • KNOWN AS “LLC” • RELATIVELY RECENT ADDITION IN THE LEGAL WORLD • MORE FLEXIBILITY THAN CORPORATIONS WITH SAME BENEFITS • OWNERS ARE CALLED “MEMBERS” • NO LIMITATIONS ON OWNERSHIP – FEWER FORMALITIES • FORMED BY FILING ARTICLES OF ORGANIZATION WITH THE STATE CORPORATION COMMISSION • SAME AS C CORPORATION IN MOST RESPECTS • “PASS THROUGH” TAXATION • SOME DIFFERENCES IN WITHHOLDING TAXES

7. CHOICE OF ENTITY TYPE FACTORS TO CONSIDER • CHOOSING AN ENTITY TYPE IS A CRITICAL STEP WHEN SETTING UP A NEW BUSINESS. CARE MUST BE GIVEN THAT OWNER’S NEAR AND LONG TERM NEEDS ARE MET. • LIABILITY PROTECTION • CONTROL • TAX TREATMENT • EASE OF FORMATION AND MAINTENANCE • GOVERNANCE AND OPERATIONS

8. THANKYOU! Paul McCourt Curley Phone 804-355-8273 Email paul.curley@sixeastlaw.com