566 Canine Sports Medicine and Rehabilitation
Corporations
A corporation is a group of people or a com-
pany acting as a single entity. There are several
different types of corporations depending on
whether they issue stock and whether they are
for‐profit or not. If the corporation is set up to
issue stock, shareholders use money to pur-
chase stock/shares in the company. The cost to
purchase stock/shares is based on the valua-
tion of the business as determined by an
accountant assessing several variables. There is
significantly more paperwork required to start
a corporation than an LLC or partnership.
There are two types of corporations, S and C,
with the differences listed below.
C‐Corporation
In general, all corporations are automatically
classified as C‐corporations unless the corpora-
tion elects instead to be an S‐corporation. The
C‐corporation offers great tax planning flexibil-
ity and can shield shareholders from direct tax
liability because the corporation is taxed sepa-
rately from its owners. There is no limit on the
number of shareholders allowed.
S‐Corporation
An S‐corporation is considered a pass‐through
corporation based on how it is taxed. An S‐cor-
poration requires the shareholders to have rea-
sonable compensation but it allows them to
consider all earnings profits as distributions, and
to pass them through their personal tax returns.
This avoids double taxation. It also provides the
same protection from personal liability as a C‐
corporation. S‐corporations are limited to 100
shareholders, and can have only one class of
stock.
Business start‐up team
Legal
Having a good corporate attorney is essential
when choosing the right business structure, set-
ting up the corporate binder, issuing stock cer-
tificates, and assuring that all documents are in
order. The attorney can also help to write
partnership/shareholder and employment
agreements, job descriptions, and employee
handbooks. Having good legal representation
from the beginning will help minimize legal
issues in the long run.AccountantAn accountant helps to determine the tax
implications associated with each type of busi-
ness entity. The accountant should have expe-
rience with small to mid‐sized businesses, and
can help to minimize tax liability. An account-
ant can oversee and generate reports, projec-
tions, and profit and loss statements and
business valuations. They can help with deci-
sions regarding new equipment lease/
finance/purchase, accounts receivables, and
cash flows.Business plan
A good business plan is essential to starting a
business. It will explain the structure of the
business, and can assist when pursuing fund-
ing from a bank/lender. Books such as How to
Write a Great Business Plan (Sahlman, 2008)
and How to Write a Business Plan (McKeever,
2017) are helpful. Useful websites include
GoBusinessPlans.com, Business.com, and
BizPlanEasy.com. These resources offer detailed
information on proper layout and what to
include in each section of the plan, and also
provide templates for business plans.The busi-
ness plan should include the following infor-
mation, the purpose of which is to show the
feasibility of business success.Executive summaryThis is the most important part of the business
plan, and some suggest writing it last as it is a
summary to highlight what has been written
elsewhere in the plan. An individual reading
this short summary will continue reading if
their interest has been piqued. If not, they will
discard it. Make it stand out!