Registrationof new companies

• Corporations "S"

• Corporations "C"

• LLC

• Partnership

• Proprietorship

Corporation"S "

Advantages:

1. there is no double taxation of earnings

2. limited liability

3. profits are not subject to the tax on self-employment (self - employment tax)

Disadvantages:

1. a limited number of shareholders

2. legal residence in the U.S. required

3. Federal and State tax must be paid in a given tax year, even when there has been no distribution of profits to shareholders

4. employee benefits may be taxed on the personal settlement of the shareholder

5. the company's activity is limited to the territory of the United States

Corporation"C"

Advantages:

1. limited liability

2. employee benefits are not taxed on the personal settlement of the shareholder

3. there is no limit in the number of shareholders

4. the company may have its subsidiaries outside of the U.S.

Disadvantages:

1. double taxation

LLC

Advantages:

1. limited liability

2. there is no limit in the number of owners

3. owners may be corporations

4. may be registered as a corporation, partnership or proprietorship in terms of tax

Disadvantages:

1. income may be subject to tax on self- employment (self-employment tax)

Partnership

Advantages:

1. easy to setup

2. easy accounting

3. if there is a loss in business, it may lower other income on the private settlementof partners

4. responsibility divided into partners

Disadvantages:

1. partners bear full legal responsibility

2. employee benefits may be taxed

3. taxes must be paid by the partners in the year of profit

4. earnings are subject to tax on self-employment (self - employment tax)

Proprietorship

Advantages:

1. easy to setup

2. easy accounting

3. one owner

4. easy to dissolve

Disadvantages:

1. the owner bears 100% of responsibility

2. the entire net profit is subject to tax on self-employment (self-employment tax)