Hassle-Free Business Formation Services for Entrepreneurs
Find the right structure Identify the best structure
to start your business
At M7, we not only help you with your business formation, but we make sure you would be able to take it to next level!
Types of business structures:
Why form your business with M7?
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We’ll guide you in establishing your business with assurance, making sure all necessary forms are filed correctly, saving both time and money, and guaranteeing your complete satisfaction.
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As a sole proprietor, all your profits are subject to self-employment tax. By forming your LLC with an S Corp election, you could potentially save thousands in taxes.
Working with M7 has been a game-changer! They helped us set up our business correctly from the start, saving us time and money by ensuring everything was in place. Now, our company has reached 7 figures. they cares about our success and consistently provides strategies that set us up for long-term growth.
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Business entities offer tax advantages, like saving on self-employment taxes with an S Corp election. After forming an LLC or corporation, file the election with the IRS, set up payroll, and pay yourself a reasonable W-2 salary. For existing entities, the election is typically due by March 15th.
Businesses can also deduct expenses (e.g., advertising, mileage) and access credits for renewable energy, retirement plans, or health insurance. Staying compliant with financials and state requirements is essential. Seek legal advice for personalized guidance, as tax and legal requirements vary.
How you choose a business structure depends on a lot of things. Each structure comes with its own specific rules, requirements, and considerations. The most common types of businesses are:
- Sole Proprietorships
- S Corp
- C Corporations
An Employer Identification Number (EIN) is a unique identifier issued by the IRS for tax purposes. Certain businesses are required to have an EIN, such as partnerships, corporations, and sole proprietorships or LLCs with employees, excise tax obligations, or retirement plans. All of our packages include obtaining an EIN as part of the setup process.
An S Corporation (S Corp) is a tax election for LLCs or corporations that allows income, losses, deductions, and credits to pass through to the owners, avoiding double taxation. The company doesn’t pay taxes; instead, income is taxed at the owner's individual tax rates, potentially reducing tax liability compared to self-employment taxes.
Steps for S Corp Election:
- Obtain original business filing documents (LLC or corporation) and an EIN.
- LLCs must elect to be taxed as a corporation before proceeding.
- File IRS Form 2553, Election by a Small Business Corporation.
Operational Requirements:
- Owners must draw a reasonable salary and handle payroll taxes quarterly.
- Maintain accurate financial records and comply with state-specific annual filings.
Simplified Solutions:
Using professional services simplifies the setup and ensures compliance, saving time and reducing errors.
A sole proprietor typically operates a business without creating a separate legal entity, reporting income directly on their personal tax return. On the other hand, a Limited Liability Company (LLC) is a legal entity that can offer personal liability protection, safeguarding the owner's personal assets from certain business debts or liabilities. For tax purposes, sole proprietors and single-member LLCs are generally treated the same unless the owner elects a different tax classification, such as an S Corporation.