Business Entity Selection
Entity selection is very important for business owners and warrants serious consideration for a number of reasons. These reasons include: lowering or controlling your income taxes, protecting your personal assets, reducing risk from creditors and built-in catastrophe insurance. Of course, our main focus is the reduction of income tax liabilities but, other factors also must be considered before a final decision is made on; what is the best business entity for your business.
Available business entities include proprietorships, general partnerships, limited partnerships, C-corporations, S-corporations, limited liability companies and limited liability companies electing to be taxed as a C-corporation or an S-corporation. A number of factors are considered in order to properly decide the entity best suited for your business. To start, each entity has its own peculiar tax characteristics. Those tax characteristics may include how the IRS taxes the income from that particular type of entity, is the income subject to double taxation, does the type of business make certain entities “unfit” for that business, are the assets in the business subject to unfavorable restraints inside certain entities, are deductions limited in certain entities and does the Internal Revenue Code put a burden on certain types of businesses operating inside certain types of entities.
The non-tax considerations may include ease of operation, protection from creditors, catastrophe protection in high risk business operations, flexibility among owners, ease of entering and exiting the entity and the ability to distribute profits and losses without consideration to ownership.
Our years of experience in entity selection make us a valuable part of your decision to choose an entity for the operation your business.
