CH A P T E R 3
• Self-employment tax savings: A C corporation can offer selfemployment tax savings.17 Articles of Incorporation (sometimes called a Certificate of Incorporation) must be filed with the state and the necessary filing fees paid to register a VRP business as a C corporation.18 When they are formed, C corporations are required to adopt bylaws, hold an initial meeting of directors and shareholders, and issue shares of stock to owners. With three steps, starting a C corporation with any online business filing site is easy. I suggest you meet with an experienced attorney and/or accountant to complete this step for your business. And remember, your VRP is a business.
3.4 LLCs There is another business entity type that is formed under state law and provides personal liability protection: an LLC, which stands for Limited Liability Company. An LLC gives its owners (who are called members) greater flexibility than a corporation in deciding how it will be managed and how fi nancial interests will be split. An LLC is similar to an S corporation in terms of taxes because it is a pass-through entity. The business income and expenses of the LLC are reported on the personal tax return of its member(s). If you are the only member of an LLC, you will report your LLC’s income and expenses on Schedule C of Form 1040. This is the same schedule used by sole proprietors. If there is more than one member, the LLC is taxed like a partnership. An LLC can also choose to be taxed like a C corporation by filing a form with the IRS. If it qualifies, it could also be taxed like an S corporation. 17. https://ct.wolterskluwer.com/resource-center/articles/c-corporations-offer-advantagesand-disadvantages Accessed June 27, 2019. 18. https://www.bizfi lings.com/toolkit/research-topics/incorporating-your-business/whatare-aricles-of-incorporation Accessed May 16, 2019.
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