Which type of business entity to set up ?
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Which type of business entity to set up ?
I want to start an animation company, with no limit of employs, no board of directors, will work on animation movie projects on crowd funding basis and will be published on movie halls.So which type of business entity to set up ?
Asked on April 11, 2017 under Business Law, Alaska
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
You want to create a limited liability company or LLC. Like a corporation, an LLC will protect your personal assets and income from most (but not all; no form of protection is absolute or perfect) business debts and obligations (so long as you do not personally guaranty or assume said debts or obligations). Unlike a corporation, however, there is no board of directors, no need for corporate meetings and the minutes (records) thereof, no need for corporate resolutions, etc. to authorize business actions, etc., so it is a more "informal" and simpler-to-operate structure. It also gives you great flexibility, should you have (or in the future want) other partners about how much ownership, how much profit participation, and how much control/authority you grant each--basically, you can give any other "member" (owner) whatever share of money and control you want, simply by putting that into an "operating agreement." And like a subchapter-S corporation, you can elect pass through (or "partnership") tax treatment so as to not have "double taxation"--the LLC will not pay its own taxes prior to distributing money to you (which would then be taxed as part of your personal income)--rather, all profits and losses "drop" to your own personal bottom line and are only taxed with your own income taxes.
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