Hawaii Business Registration

hawaii_business_registration

Links to register a business and information about registering as a Sole Proprietor or Corporation in the State of Hawaii.

BUSINESS REGISTRATION

ONLINE BUSINESS REGISTRATION https://hbe.ehawaii.gov/BizEx/home.eb
SEARCH FOR REGISTERED BUSINESS NAMES  http://hbe.ehawaii.gov/documents/search.html?mobile=Y


Sole Proprietorship – C Corporation – S Corporation – LLC

Sole
Proprietorship

C Corp
Limited Liability Company (LLC)

S Corp

Formation
Requirements,
Costs
None
Must file with state,
state specific filing
fee required.
Must file with state, state specific filing fee
required.
Must file with state,
state specific filing
fee required.

Personal
Liability
Unlimited liability.
Shareholders are not
typically held liable.
Members are not typically held liable. Shareholders are not
typically held liable.

Administrative
Requirements
Relatively few
requirements.
Election of board of
directors/officers,
annual meetings, and
annual report filing
requirements.
Relatively few requirements Election of board of
directors/officers,
annual meetings, and
annual report filing
requirements.

Management
Full control.
Shareholders elect
directors who
manage business
activities.
Members can set up structure as they choose. Shareholders elect
directors who
manage business
activities.

Term
Terminated when
proprietor ceases
doing business or
upon death.
Perpetual: can extend
past death or
withdrawal of
shareholders.
Perpetual, unless state requires fixed amount of
time.
Perpetual: can extend
past death or
withdrawal of
shareholders.

Taxation
Entity not taxable.
Sole proprietor
pays taxes.
Taxed at corporate
rate and possible
double taxation:
Dividends are taxed
at the individual level
if distributed to
shareholders.

Possibly, depending on restrictions outlined in the operating agreement.
No tax at the entity
level. Income passed
through to the
shareholders.

Double Taxation
No
Yes, taxed at
corporate level and
then again if
distributed to
shareholders in the
form of dividends.
No No

Self Employment
Tax
Subject to self
employment tax.
Salary subject to self
employment tax.
Salary subject to self employment tax. Salary subject to self
employment tax, but
shareholder
distributions are not
subject to
employment tax.

Pass Through Tax
Treatment
Yes
No
Yes Yes

Tax Forms
1040
IRS Form 1120
1 member: sole proprietor IRS Form 1040 – Schedule C
Partnership: IRS Form 1065, Members get K-1
IRS Form 1120S
Shareholders get K-1
for personal tax
returns.

Transferability of
Interest
No
Shares of stock are
easily transferred.
Possibly, depending on restrictions outlined in the
operating agreement.
Yes, but must observe
IRS regulations on
who can own stock.

Capital Raising
Individual provides
capital.
Shares of stock are
sold to raise capital
(Securities laws
apply).

May sell interests, but subject to
operating agreement(Securities laws may also apply).
Shares of stock are
sold to raise capital.
Limitations prevent S
corp stock ownership
by corporations.

Ease of Operation
Easiest
Must have annual
meetings, Board of
Directors meetings,
corporate minutes,
and stockholder
meetings.

May sell interests, but subject to operating agreement (Securities laws may also
apply).
Must have annual
meetings, Board of
Directors meetings,
corporate minutes,
and stockholder
meetings.


For many small business owners choosing a C corp, S Corp, or Limited Liability Company (LLC) is the first step in incorporating. The above
entity comparison table was designed as a helpful reference and is not intended as tax or legal advise. We do not provide tax or legal advice.
If you feel like you may need tax or legal advice it’s recommended that you contact an attorney or CPA.

 


June 27, 2013

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