Readers who are partners in an incorporated business may have heard of “S corporations” and that they enjoy a unique tax structure. The Small Business Administration has a lot of good information about S corporations, which we will summarize here. Also known as an S corp, an S corporation is a type of business organization in which profits and losses flow directly to the shareholders. This allows the business to avoid paying taxes; instead, the shareholders take care of it through their own personal income tax returns. This is similar to general partnerships, as we discussed in our previous post. …

So you have decided to start a new business, and you would like to set it up as a corporation. Congratulations! While you are raising capital, hiring employees, signing contracts with vendors and obtaining the necessary licenses, don’t forget to file your Articles of Incorporation. Ohio law requires all corporations in the state to file a document called Original Articles of Incorporation with the Secretary of State before beginning to do business. The Articles are relatively simple, but must include the following: The corporation’s name, which must include either “Company,” “Co.,” “Corporation,” “Corp.,” “Incorporated,” or “Inc.” The location of the …

For those who do not want to start a new business on their own, there are different types of partnerships to consider. Perhaps the simplest and easiest is called a general partnership. Unlike other forms of business organization, such as a corporation, there are no required formalities for forming a general partnership. Nor must the partners create a written partnership agreement, though it is often a good idea. Legally, a general partnership exists when two or more people are carrying on as co-owners of a business and sharing the profits. They are not allowed to draw a salary on top …

Of course, few Ohio corporations are owned and operated by amateurs. But a professional corporation or professional association is different than other types of incorporated businesses. In general, professional corporations are for groups of people in certain types of specialized fields who wish to organize as a single business. These professions include: Attorneys Health care professionals, such as doctors, dentists and physical therapists Psychologists Veterinarians Engineers Accountants Social workers Some states require people in those professions who wish to incorporate their practice to do so as a professional corporation. Other states do not require it, but do offer it as …

Buying or selling a business is not as easy as, say, ordering new office supplies. Whether your business is acquiring a competitor in order to expand, or you are looking to sell off your company to another party, there could be multiple players involved, as well as legal questions that need to be answered. First of all, if a company is acquiring another company, or two businesses are merging, there will be multiple stakeholders involved. Once negotiations between the companies are complete, usually the target company’s shareholders must approve the deal. The acquiring business will often sweeten the deal by …

When deciding how to organize your business, one big consideration will likely be whether you need to protect yourself from personal liability, in case your business ever gets sued. On the other hand, you will likely want to keep other aspects of your business as simple as possible. One good possible option for many Ohio businesses is to organize as a limited liability corporation, also known as “LLC.” As the name implies, an LLC protects its owners from personal liability for any debts, judgments or lawsuits against the business. This may protect the owners from serious financial peril someday. In …

Not all businesses have the same goal. Some people start a small business to try to turn a profit each year, expanding both the business and the owners’ personal income. Others want to create a nonprofit to serve the community in some way. In Ohio, a nonprofit organization can serve a charitable, educational, religious, scientific or community development purpose. Just as with for-profit businesses, state law contains several options for organizing as a nonprofit. The most popular form is the nonprofit corporation. To incorporate, the owner must file Initial Articles of Incorporation with the Ohio Secretary of State’s Office. The …