Featured Posts

How to Choose the Right Ownership Structure for Your Business

Many Americans are starting their own businesses these days, and may be confused about exactly what the best ownership structure is for their business. The answer is, it depends on the type of business, how many owners are involved, and the financial situation for each owner.

Here are some considerations when deciding which structure to choose for your business:

  • Risk. If your business involves some degree of risk to the products or services you provide, then a business structure that protects owners from personal liability for business debts and claims – a corporation or a limited liability company (LLC) -- may be a good choice.

  • Taxes. What the IRS calls “pass-through” entities – LLCs, sole proprietorships and partnerships – require business owners to report business profits and losses on their personal tax returns and pay taxes on net profits. Corporation owners do not report corporate profits (their share) on their personal returns; the corporation itself pays taxes, at corporate tax rates, on retained earnings. Although having a corporation may add more tax reporting paperwork, it can also benefit some businesses since corporate tax rates are usually lower than the individual rate.

  • Complexity. LLCs and corporations are more complex entities than sole proprietorships or partnerships, generally requiring more time and money to create and maintain. LLCs and corporations also require meticulous record keeping and the performance of other duties not required by sole proprietorships or partnerships.

If you’re a small or mid-size business owner, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit. Normally, this session is $1,250, but if you mention this article and we still have room on our calendar this month, we will waive that fee.

Recent Posts
Archive

 

 

 

 

 

 

Search By Tags
Follow Us
  • Facebook Basic Square
  • Google+ Basic Square

The Law Office of Jane E. DePalma

PO Box 4094

Dedham, Massachusetts 02027

phone: 781-326-8300 



Copyright 2013 The Law Office of Jane E. DePalma

All rights reserved.

This web site may be considered advertising under Massachusetts Supreme Judicial Court Rules and other state ethical rules. Prior results do not guarantee a similar outcome.  The content of this web site is for informational purposes only and is not intended to provide legal advice, should not be relied upon in order to solve individual or general legal matters, and is not a substitute for personal consultation with legal counsel.  Specialization does not imply or infer expertise. This web page does not establish an attorney-client relationship.