Hi, my name is Brett Alter. Sure, this week's topic is the formation of a company. A lot of people think about going into business for themselves and they want to form some type of a legal entity separate from themselves so they can operate their business and have certain benefits, whether it's tax or limited liability. I'm going to discuss some of those today. I'm going to discuss their advantages and their disadvantages. Some of the more common types are incorporation. Two of the most common types of corporations are C corporations. Typically, the corporation is taxed for every dollar that comes in at the corporate level. Then, if there's a distribution made to the shareholders, that same dollar is taxed again at the shareholder level. So, a lot of people try to avoid having double taxation and they may want to form the second most common type, which is an S corporation. That is Subchapter S of a certain tax code which is elected and must be followed strictly to be able to get that S Subchapter status. That means that the corporation would not be taxed twice. It would have the benefit of just a single taxation of any money that comes in. Now, the benefit of a corporation is that there's full liability coverage. In other words, the shareholders, the officers, the board of directors of the corporation cannot be sued personally for any debts that arise on behalf of the corporation. They typically can also not be sued for any type of actions or omissions in their normal course of duties. Now, gross negligence or intentional will render certain individuals liable on behalf of the corporation, but generally speaking, the shareholders, officers, and board of directors have full limited liability. The second most common type...
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