Corporate Tax: Start-up Exemption Scheme

• LIABILITY – Stockholders personal assets are not subject to claims of creditors. The corporation itself is responsible for its actions and liabilities. • INCOME TAXES – Shareholders in a corporation are subject to “double taxation” as in first the corporation is subject to corporate taxation, then money is paid out in dividends. Which then is taxed again as personal income tax. • LONGEVITY - The life of a corporation is limitless as

1) Section 351: Since Individual will be in control (80%+ ownership) of future corporation, he will not incur a taxable event

In a C- Corporation the profits are divided among the stockholders. The amount of profits depend on the percentage stocked owned. For example if you owned 15 percent of the corporation’s stock, you may receive 15 percent of the profits. The more stock you own the greater the return.

* Taxes are paid through the corporation on a corporate tax return. It is separate from the owner’s income taxes, commonly referred to as shareholders. Shareholders also include income or losses on stocks sold or dividends earned on their yearly individual tax return.

Income Taxes: The Corporation pays both state and federal taxes on its earnings. Excess earnings may be shared with stockholders in the form of dividends, on which the stockholder then pays taxes.

Business taxes can have a huge impact on the profitability of businesses and the amount of business investment. Taxation is a very important factor in the financial investment decision-making process because a lower tax burden allows the company to lower prices or generate higher revenue, which can then be paid out in wages, salaries and/or dividends. Business taxes include, Federal Income Tax; a tax levied by a national government on annual income, Payroll Tax; a tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee, Unemployment Tax; a federal tax that is allocated to unemployment agencies to fund unemployment assistance for laid-off workers, and Sales Tax; a tax imposed by the government at the point of sale on retail goods and services. Sales tax is based on a percentage of the selling prices of the goods and services. Consumers pay sales taxes, but effectively, business pay them since the tax increases consumer’s costs and causes them to buy less.

After EGTRRA: tax rates are as follows 50 percent in 2002; 49 percent in 2003; 48 percent in 2004; 47 percent in 2005; 46 percent in 2006; 45 percent in 2007-2009. The estate

When starting a new business, it is very important to decide the form of legal entity which may be appropriate based on a number of factors. The legal entity can be sole proprietorship, partnerships (general and limited liability partnerships), limited liability companies, or corporations. One of the most important factors to consider when deciding the appropriate form of legal business entity is complexity. If one has limited capital and wishes to start a simple business unit, then sole proprietorship is the most appropriate. The second factor is the need for protection from the risk of liabilities. If the new business operates in a volatile industry where it is possible to experience huge financial losses, then a limited liability company or partnership can be considered appropriate. The ease of formation is another factor. It is easy to form a sole proprietorship as opposed to other forms of businesses. The issue of taxation may also influence the form of business entity that a person or group of people may choose. The aim is always to minimize tax as much as possible. According to Chiappinelli (2006), another important factor that should always be considered is the ease with which capital can be raised. It is easier to raise capital in limited liability companies or in corporations than it is in sole proprietorship.

business, you will not be obligated to pay taxes at a corporate level. Instead, the shareholders in

Due to the fact that corporations are separate legal entities from their owners, C-corporations are taxed separately requiring the filing of IRS Form 1120 each year to report its income and take advantage of any credits or deductions for which the corporation may be eligible (Internal revenue Service (IRS), 2012b). Income tax rates for corporation are tailored to corporations and as such are different from those

We propose a joint venture, in the emerging markets of Exotica with local companies of Paradiso

Business Taxes also known as corporate tax is imposed by the government on the businesses, which becomes government's income that it uses in development and welfare work (Cope, pg. 19). Corporate tax is an expense for the business but if it is too high the business will be reluctant to pay these taxes this might even increase the chances of tax invasion. Business might also try to shift the taxes incidence on the buyers in the term of high prices, which might give rise to inflation, on the employees in terms of low wages that might make standard of living low, and on the shareholders in terms of low profit causing them to withdraw their investments. Although this all seems not so serious but apart from these private cost on the employees, customers and shareholders it also increases the social cost. When businesses especially ones, which sell goods whose prices elasticity of demand is elastics, cannot increase prices they look for ways to cut down on the quality or the quantity of the product in order to reduce their cost of production and to increase their profits. This decreases incentive to produce and therefore the GDP is affected. In order to cut down on the cost of production they use resources of poor quality, which harms the environment in term of air pollution. Furthermore which burden of high taxes on them they might ignore the necessary laws of disposing of the waste from the factories in a proper way. The dreadful effect of raise In the prices of

I’ve summed up the introduction of Taxation to these slight words. Taxation is defined as a way that the government able to generate or collect revenue from the citizen of one’s nation through different sources. As what I’ve learned from Taxation course that there are two types of taxation, direct which are paid by the taxpayer directly to the government, and indirect which are collected by an intermediary (like a retail store) from the consumer. The intermediary who will file the tax return later and forward the amount of the money to the government with the return. This tax is applicable to organizations and individuals. In this reflection, I would like to highlight what I learned of business and individual taxation, the experience on working with a group for the project and what challenges I faced and how I was able to get past.

For SMEs, there is an SME fund which will make cheap funds at a single digit interest rate accessible to qualified SMEs for improved productivity and job creation. In addition, SMEs pay a lower rate in the first five years in several sectors. Dividends are also exempt

An exemption is a clause in a contract that exempts or removes liability from one or both parties in certain circumstances. Exemption clauses are used frequently in business organization contract. These clauses apportion risk between the parties concerned and the law upholds them, assuming the parties negotiated them while drafting the contract