To avoid double taxation, you could spend the funds out as salaries to you and any other corporate shareholders. The franchise tax can be an amount based on revenue, an amount based on profits, or an amount primarily based on the number of owners or the amount of capital employed in the state, or some mixture of those elements, or merely a flat fee, as in Delaware.

A corporation can problem shares of stock and sell percentages of the enterprise to its owners, which are known as shareholders. Based on elections created by the LLC and the number of members, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC’s owner’s tax return (a disregarded entity”). In most states, even so, the fee is nominal and only a handful charge a tax comparable to the tax imposed on corporations.

The procedure is a … Read More