S Corp or LLC, Which One for Me?

How Both Are the Same:

The major benefits of both the LLC(Limited Liability Comapny and S Corp entity lies in the limited liability they offer owners.  Owners of these businesses are only liable for the capital they themselves have put into the company.  Your personal assets including your house and your car etc., are virtually untouchable if your company ever gets sued.  (This isn't always the case.  Depending on the situation "piercing the corporate veil" can actually occur.)

LLC's and S Corp's also benefit from having "pass-through" taxation by the IRS.  This just means that you don't have to pay corporation taxes and then pay taxes on the salary you received from the corporation, which is how a c corp works.  This is referred to as "double-taxation" and is one of the disadvantages of forming a c corp.

 You can also deduct pre-tax expenses with both of these business formations.  These would include travel expenses, uniforms, phone calls, computers for the business, car expenses and health care premiums.

The Differences: 

LLC:
There are many benefits alone for using an LLC as your business structure.  The major advantages include:

• Very easy to create and maintain especially when compared to how an S Corp is formed.
• Cost of set up is very low.
• Flexibility in how the company is ran and how you want to be taxed.

One of the major disadvantage of LLC's is that you have to pay self-employment tax on any income generated from the business.  This means that you must pay quarterly tax payments to the IRS.

S Corp:

The biggest advantage that the S Corp has over the LLC is in how owners are paid.  The S Corp pays employees a "reasonable" salary, which just means congruent with industry standards, but you can deduct federal taxes and FICA.  After this, any remaining profits are distributed to the owners as dividends, which happen to be taxed at a much lower rate.

The disadvantages of forming an S Corp lie in just how strict the guidelines are in establishing this corporation.

1. You must be a US citizen or resident.
2. Corporation cannot have more than 100 shareholders.
3. Can only have one class of stock.

It is also more expensive to form an S Corp.

Depending on what exactly your business does and what it will be doing in the future can greatly change how you want to form your business.  Make sure to look at all the factors when deciding which entity is best for your business.

If you are ready to form your business please visit Apex Legal Filings, LLC and they can help you.

Tort Law Basics

What is a Tort?-
A tort is a civil wrong (other than a breach of contract) that causes injury or other damage for which our legal system deems it just to provide a remedy. The primary focus of Tort Law is to repair a private wrong.

Purposes for Tort Law-

Peace: In order to provide a peaceful means for adjusting the rights of parties who might otherwise “take the law into their own hands.”

Deterrence: To deter wrongful conduct.

Restoration: To restore injured parties to their original state by compensating them for their injury.

Justice: To identify those who should be held accountable for the harm that resulted.

Categories of Torts-
There are three main categories of torts:
1. Negligence
2. Intentional Torts
3. Strict Liability Torts

1. Negligence is harm caused by the failure to use reasonable care.
2. An intentional tort is a tort in which a person either desired to bring about the result or knew with substantial certainty that the result would follow from what the person did or failed to do.
Types of intentional torts include: battery, assault, trespass, and false imprisonment.
3. Strict liability is having responsibility regardless of blameworthiness or fault.

Civil vs Criminal Law

Civil law is the area of law that encompasses lawsuits brought by individuals who have suffered private wrongs for which they are seeking some form of compensations. Civil law includes tort law, property law, domestic relations law, contract law and probate law. Criminal law is the area of law that deals with the wrongs done to an individual that result in harm to society as a whole. The purpose of criminal law is to punish those who commit crimes such as murder, robbery, theft, arson and sexual assault.
Although the same act can be both a civil wrong and a criminal wrong (theft), several differences exist between civil and criminal law. The purpose of civil law is to compensate victims by providing them with some form of monetary damages. The purpose of criminal law is to punish those who have committed a wrong. Punishment is accomplished by confining and/or fining the wrongdoer. The civil law acts on behalf of the individual wronged and that individual brings suit to recover damages. The criminal law acts on behalf of the state, which is considered the offended party, and the prosecutor of the state represents the state in the courtroom.
The plaintiff (person who sues) has a burden of proof known as the preponderance of the evidence that must be shown in court. In the preponderance of the evidence burden of proof, the plaintiff must prove that it is more likely than not the defendant committed the wrong. In the beyond a reasonable doubt standard, the state must remove all reasonable doubts from the jurors’ minds.