A strategic plan enables businesses to formulate a practical strategy when expanding an organization, turning around a declining business, introducing a new product or service. The plan acts as an operational blueprint, which outlines current operating conditions, planned objectives and how to achieve them. The plan makes it easier to develop marketing strategies. It provides guidelines on campaigns and states the timeline.
Experienced consultants can help organizations develop viable strategic business solutions. The journey to a successful venture starts with choosing the ideal legal structure.
Sole proprietorship are easier to run because decisions are reached much faster and eliminate double taxation. Provide complete operational control of the business, which eliminates the need to seek partners’ consent in the decision-making process. Tax preparation is simple because there is no need to file forms separately. They are inexpensive and easy to form.
However, business owners assume unlimited personal liability and deprive the entity of complementary skills because there is one owner. There can be difficulty raising operating capital; many investors and banks are not keen on taking risks associated with sole proprietorships.
A C corporation is a more complex entity that is legally independent. Unlike partnerships or sole proprietorships, a C Corporation is owned by shareholders who enjoy limited liability to business risks. Running this type of business entails a lot of administrative fees, paperwork as well as complex legal and tax requirements. It is a viable option for established firms with multiple employees.
Owners can raise funds by selling shares through stock offerings. Corporations often use the offering to attract both capital and highly qualified employees. The majority of states recognize both stock and non-stock corporations (nonprofit organizations).
Articles of incorporation, the issuing of stock certificates and the appointment of directors are some of the key regulatory requirements associated with the registration process. It is also necessary to set rules (bylaws) governing the entity’s daily operations. This requirement encompasses various aspects, including appointment and responsibilities of officers, shareholder as well as director meetings.
The board of directors must schedule at least one meeting annually. They are responsible for making major decisions, some of which require the approval of shareholders. States apply different rules regarding the decision-making process. The same applies to incorporation without a board of directors, among other regulatory variables.
The entity uses a separate bank account and maintains corporate records. Corporations comply with the tax rules applicable under the IRS Sub-chapter C of Chapter 1. The taxes are payable to the state and federal authorities. Income taxes are also payable, which is not the case with partnerships and sole proprietorships.
C Corporations remit taxes on two instances. They pay out after earning profits and during the disbursement of dividends to stockholders. The later is applicable on personal tax returns.
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