Guiding Startups: Advice from our Partners at Bass Law & Core Group
Entrepreneurs face numerous challenges during the startup process. A lot of them – legal, accounting, HR, etc. – are outside the core competency of the startup’s founders and it would be great if we could ignore them, but we can’t. So at LaunchOklahoma, we bring together mentors and business partners to help guide startups and bring expertise and resources to bear on the problems.
“One of the common questions from new business owners is, ‘should I form a limited liability company (LLC) or a corporation?’ Although there are non-tax (e.g., legal) issues that should be considered, in this column we will address entity selection from a tax perspective. After LLC’s became common, the IRS decided to let taxpayers choose how they wanted their entity to be taxed. Essentially, when you create a new legal entity, you decide how you want that entity to be treated for tax purposes and tell the IRS by filing Form 8832. This election can be made up to three months after the new entity is created. So for purposes of this column, the question is less ‘do I want an LLC or a corporation’ and more ‘how do I want my entity to be taxed, regardless of which entity I choose?'”
Read more to find out the three tax treatment options for corporations and limited liability companies.
“While often overlooked by many businesses, strategic management of legal risks is essential to the long-term health and sustainability of a business. Successful business leaders that have built businesses that withstand the test of time understand this crucial truth: devoting your life, time, passion, and assets to a growing and vibrant business could be all for naught if you are exposed to a fatal legal risk. What follows is a slit of seven of the most common legal risks faced by small and medium-sized businesses.”
Read more to discover the seven most common legal risks small businesses face.
“The main difference between an employee and an independent contractor is the control of the work process. In an independent contractor relationship, the hiring party controls only the end result and the independent contractor controls how the work will be performed to achieve this result. By contrast, in an employer-employee relationship the employer controls both the end result and how the work will be performed. Whether a worker is properly considered an employee or an independent contractor is not always an easy determination.”
Read more to find out differences between an independent contract and employee and the legal risks involved in classifying incorrectly.
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