FMLA stands for the Family and Medical Leave Act. It is a federal labor law, generally applicable to employers with 50 or more employees, that allows eligible employees to take up to 12 weeks of unpaid leave a year for qualified family or medical related reasons.

Buy-sell agreements are contracts between business owners to address various situations under which one or more owners have the option or the obligation to sell their ownership interest, and other owners (or the company) have the option or obligation to purchase that interest. Common triggers of these buy and sell rights include an owner’s death, disability, termination of employment, and receipt of a third party offer to purchase the interest. These are put in place to protect a company’s stability and longevity should a triggering event occur, and to limit disputes that can arise in those circumstances. The agreement would usually address price determination, payment terms, and timing, along with other matters. If one of the business partners dies and there is a buy-sell agreement in place, oftentimes life insurance policies are used to fund the buyout. Buy-sell agreements safeguard the company, stakeholders in the company, employees, and even clients and customers.

This is the most common and straight forward business structure where one person is the owner. This business is not incorporated, which means less government involvement but also less government protection. Generally speaking, the owner pays personal income tax and self-employment tax on the business profits earned. The owner is solely financially liable for the business. Which also means that if the business needs to settle a debt or a legal claim, your personal assets may be at risk. This type of business structure offers simplicity and more control for the individual owner.

An LLC is structured in a way that offers owners the chance to limit their personal liability which protects their personal assets. It offers flexibility like a partnership does, but it provides protection of assets like a corporation does. LLCs are common in Michigan. They are inexpensive to start and easy to set up. You are required to file original articles of organization which should contain all the information required to form your LLC. They offer flexible management structures and do not put a limit on the number of members or owners the business may have. Typically, LLCs pay lower taxes than corporations. The profits that an LLC makes are treated as the business owners’ personal income, they are not subject to corporate taxation.

This business structure is also called a benefit corporation. They are a for-profit corporation, but they are also mission driven. They must receive a certification that shows they are socially and environmentally responsible and transparent. This type of corporation is taxed in the same way as a C Corporation, so they do not receive any tax breaks. Companies that focus on the planet and people as well as making a profit should be structured as B Corporations. B Lab (the company that performs the certification assessment) says that “Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. B Corps are accelerating a global culture shift to redefine success in business and build a more inclusive and sustainable economy.” Examples of B Corporations would be TOMS, Ben and Jerry’s, Thrive Market, and Seventh Generation, among many others. B Corporations build trust with their consumers and have the advantage of attracting investors because of their business mission.

Businesses structured as C Corporations are independent of their shareholders. They are the most prevalent type of corporation as they provide defined tax and ownership structures.

• They are for profit companies that pay tax on the profits.

• Funds distributed out to the shareholders as dividends can also be taxed.

• They can be expensive to start and require extensive record keeping.

• They have strong personal liability protection for their shareholders.

• They have no limit on the number of shareholders they can have and can also offer stock options.

Generally speaking, an S Corporation business structure passes taxable income, credits and deductions, and losses to its shareholders. They have a special tax status with the IRS which provides them with some tax advantages.

• A business must meet certain IRS requirements to become and remain an S Corporation.

• An S Corporation does not pay corporate taxes, because the profits and losses are passed through the business and reported to the shareholders personal tax returns.

• Like all corporations, they must file articles of incorporation.

• Typically, S Corporations are smaller businesses since they cannot exceed 100 shareholders and they must hold shareholder and director meetings.