Many “start a business services” offer confusing online forms that ask hard questions and then spit out a generic document that you have to file yourself. These automated services leave people confused and frustrated.
Step one is to familiarize yourself with the most common types of business structures.
Sole Proprietorship: If you start conducting business and don’t file for another entity type, you’re considered a sole proprietor. Sole proprietorships offer virtually no legal liability protection.
Limited Liability Company (LLC): An LLC protects your personal assets from business debt, offers simplicity in management and flexibility in taxation. They are a great choice for many businesses.
C Corporation: C Corps offer the strongest protection from personal liability but are more complex to set up and manage. Also, C Corps are subject to double taxation in certain situations.
S Corporation: S Corps combine the formality and protection of C Corps with the flexibility and pass through taxation of LLCs, which allows you to avoid the double taxation of C Corps.
Entity selection requires you to consider critical tax and legal factors that will impact your business over the long-term. Integrity 1st Tax begins with a business questionnaire and a consultation.