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The Entrepreneurs Guide To Forming A Business Entity - Issues every business owner should consider before starting or restructuring their business
by:Michael J. McCormick CPA
One of the first and possibly most important decisions that a business owner must make is how thier business will be organized. So, it's no surprise that one of the most common first questions I receive is- "Should I be a ____?" . The blank could be filled with LLC, S-Corp, or any of the other various possibilities. There are many tax strategies that can...
One of the first and possibly most important decisions that a business owner must make is how thier business will be organized. So, it's no surprise that one of the most common first questions I receive is- "Should I be a ____?" . The blank could be filled with LLC, S-Corp, or any of the other various possibilities. There are many tax strategies that can be implemented by business owners to reduce their tax liability. In reality the first strategy to consider is, in what form should this business operate. This decision will effect most if not all of the other tax strategies implemented by the business. Information related to entity selection is available in many places in bits and pieces . So I decided to consolidate as many of the issues as I could into a single, logical framework. So I had one source to share with my business owner clients to help them determine the areas most important to them and help them evaluate their options. In this book, I have summarized all of the entities from which a taxpayer may choose to operate, provided an overview, a description of how they work, most of the tax and non-tax considerations, and some of the advantages and disadvantages of each entity type. I've tried to describe for whom the entity is best suited, and for whom the entity may not be the best option. Please remember that each entity type will have strengths and shortcomings when it is applied to your specific situation. The best you can do is try to select the entity that has more of the former while trying to limit exposure to the latter. I hope that you find this information useful in your quest to find the best entity type for your business.
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