How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Loren Your Own Question

Loren
Loren, Attorney
Category: Business Law
Satisfied Customers: 20105
Experience:  30 years experience representing clients .
Type Your Business Law Question Here...
Loren is online now
A new question is answered every 9 seconds

I need a comprehensive answer please. Hi, I incorporated

Resolved Question:

I need a comprehensive answer please.
Hi,

I incorporated a C CORPORATION in the state of Nevada in January 2010 for the purpose of conducting business of online sales of textbooks etc.Currently my business is based in Los angeles california.

I am drawing a salary from the corporation equivalent to $ 2500 every month.
The problem is that I am unable to draw more money as salary from the corporation every month as it would increase the social security as well as the federal tax liability.
What is the way of drawing more money from the corporation everymonth without substantially increasing the tax liability .
Do you suggest I change the status of the corporation to an S CORPORATION.
What are the advantages of an S coprporation over a C coprporation????
Thank you in advance.
Submitted: 3 years ago.
Category: Business Law
Expert:  Loren replied 3 years ago.
If you convert to an s Corp (and you may have to dissolve and reincorporate because there are time limits for making an s Corp election) you can continue with your payroll but you can take everything out. The main benefit is that you do not get taxed at the corporate income level. The s corp is a pass through entity and all profits and losses pass to you.
Customer: replied 3 years ago.
Thanks,
Does that mean I cannot take money out of the C corp without avoiding tax at the corporate level in addition to personal level.
Are there any advantages of a c corp over an scorp?
Expert:  Loren replied 3 years ago.
A c Corp has a double taxation. One at the corporate level and one on the shareholder. Not all situations qualify for s Corp status. There are restrictions on how many shareholders and who can be a shareholder. A C corporation is probably preferable if you plan to offer employee stock options, which could be classified as a second class of stock.
Customer: replied 3 years ago.
Thanks what is employee stock options?
My company is a one man show with no employess at the moment,and would not have more than 3-4 shareholders,and probably 3-4 employees.
Expert:  Loren replied 3 years ago.
Stock options are a form of compensation where an employee is granted the right for a certain period of ti e to purchase company stock at a preset price. If you qualify for s Corp status, and it sounds like you do, that is probably the way to go. As always, refer to local counsel to protect your rights in this matter before taking any action.
Loren, Attorney
Category: Business Law
Satisfied Customers: 20105
Experience: 30 years experience representing clients .
Loren and 3 other Business Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • Law Pro

    Attorney

    Satisfied Customers:

    1426
    20 years experience in business law - sole proprietor, partnership, and corporations
< Last | Next >
  • http://ww2.justanswer.com/uploads/LA/lawpro/2012-6-25_171315_PT206740s.64x64.jpg Law Pro's Avatar

    Law Pro

    Attorney

    Satisfied Customers:

    1426
    20 years experience in business law - sole proprietor, partnership, and corporations
  • http://ww2.justanswer.com/uploads/DC/DCraneEsq/2012-8-14_14436_DCrane.64x64.jpg MShore Law's Avatar

    MShore Law

    Attorney

    Satisfied Customers:

    1233
    Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    1162
    25 years of experience helping people like you.
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    1142
    Run my own successful business/contract law practice.
  • http://ww2.justanswer.com/uploads/ohioatty/2009-1-22_185545_me.jpg J.Hazelbaker's Avatar

    J.Hazelbaker

    Attorney

    Satisfied Customers:

    393
    Experienced and trained in the area of business law.
  • http://ww2.justanswer.com/uploads/scottymacesq/2009-6-10_221523_small.jpg RGMacEsq's Avatar

    RGMacEsq

    Attorney

    Satisfied Customers:

    393
    Licensed Texas General Practice Attorney
  • http://ww2.justanswer.com/uploads/BA/barristerinky/2012-6-10_22423_office.64x64.jpg Barrister's Avatar

    Barrister

    Attorney

    Satisfied Customers:

    301
    13 years practicing attorney, MBA