Any CPAs here? Corporation startup questions.

Anyone a CPA? Or incorporated a business?

I have a few questions regarding incorporating as an S-Corp RE: Authorized shares & par value. I plan on equity changing frequently based on cash investment from founders and sweat equity.

I'm not a CPA or a business owner, and therefore completely unqualified to answer your questions. I will note, however, that I see a fair number of small-to-medium businesses reorganizing as LLCs and ditching their S-corps lately. Just an observation.

I could see the advantage. I have been weighing the two options, but frequent changes in equity seem to support S-Corp over LLC.

You probably need to talk with a real CPA or an attorney to deal with what you're suggesting.

Par Value is just a number. One cent, one dollar per share, doesn't matter. It has no relationship whatsoever to the value of the stock share or what the share is sold at, exchanged for, etc.

Oh, and you probably don't want to be an S corp either. Go C Corp or Go Home.

Dr. Hess wrote: Oh, and you probably don't want to be an S corp either. Go C Corp or Go Home.

I've had several people suggest S-Corp (or LLC), including advisors at the local college Small Business center. Why would you say C-corp instead?

Well, without really knowing what your planning on doing, the differences are that a S corp is basically a pass through corporation which gives you a few minor corporation advantages, but is not much more than just getting a DBA certificate. A C corp is one that all real business use. It files its own taxes, etc., versus passing everything on to the shareholders with a S corp.

Either one really provides zero lawsuit/asset protection, regardless of what "experts" tell you.

This is relevant to me and my business. 1st accountant had me as sole proprietor, then switched to S-corp. Compared to my peers I seem to be paying an ungodly amount of taxes. Second accountant (first was a crook, and not in a good for me way)says I'm doing everything by the book but she is inexperienced. Possible 3rd accountant says she is right on the money and can't/won't tell me if switching back or to C-corp would be better for me. Same 3rd accountant had other guys paying almost zero.

Looking forward to the reasoning behind the answers.

Right now this is just an idea. Its a web-thing. It will (hopefully) become a good website with a couple apps to push data to it.

I have some sweat equity, I have a few partners that have some as well, but not as much. Some of us will be investing $$ into this, and all of us will be building additional sweat equity. I want a simple way of accomplishing this and remaining flexible. Seems like another option is form an LLC and give the company a 'loan' of xx$ to be repaid with y interest in z amount of time (or sooner).

What about an LP? You can be General Partner, the rest Limited Partners. I'd be real careful of the "loan" thing. They made a whole bunch of new rules about that stuff after the big guys were "loaning" themselves a bunch of money, then defaulting.