Searching for starting up business recommendations

[ktnguyen71]

Hi all,
My wife and I are in the process of starting up a home based business. Our employee base is staying home moms. We would treat them as our sub-contractor rather than employees. We have so many questions to ask:

Should we have a LLC, a S Corporation or a C Corporation? How does it affect our operations? Which would yeild the best tax profit? How does a business identity that we are choosing now would affect our growth in the future (moving out to a manufacture, hiring employees)?

As we all know that Woman minority owned business has some advantages, should I have her own 100% of the company or should I take some percentage? What are the pros and cons about the decision?

Any input, recommendations are appreciated. I have read some documents about the subjects but I value practical experienced recommendations.

Thanks

[jasaunders]

LLC's and S-Corps both pass the taxes to you on the federal level. There are different fees at the state level, depending on the state of incorporation. If this is a one/two person business, you will be double taxed as a C Corp if you are taking income from the company. The company is taxed and then your personal income will be taxed.
If you are having general contractors, any of the entities will be ok. If you plan on hiring employees, an S Corp or C Corp is more suited to this.
If you plan on selling shares of the company in the future and taking on external investors, a C Corp is more suited for this.

A woman, minority owned business has advantages in getting contracts, grants and funding from government and nonprofit agencies. I am not aware of any other "economical" benefits. I don't think having 100% ownership is a requirement, but you should check with the agencies you plan on soliciting to see their requirements.

As always, it is recommended you speak to an accountant and lawyer before forming your business entity.