Understand The Available Options
Common structures include sole proprietorships, partnerships, limited liability companies, C corporations, and S corporations. Each has different filing, ownership, and tax considerations.
- Consider ownership and liability needs.
- Review administrative and filing requirements.
- Compare how income and owner compensation may be treated.
Look Beyond The Current Year
Entity decisions can have long-term effects on growth plans, investor needs, payroll, benefits, and future transactions. Review the business's broader objectives before making a change.
Get Advice For Your Facts
Entity selection is a legal and tax decision that should be evaluated using your specific facts. A coordinated review with qualified tax and legal advisers can help clarify the options.
This helped me understand why reviewing books before year-end matters so much.
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