The business entity — LLC, LLP, Sole Proprietorship, Partnership, Corporation, etc.— that you select for your business has enormous financial and tax implications. You must make the right decision. Our Team of professionals will explain each choice and its advantages and disadvantages. Below are some of the Advantages & Disadvantages for the most common entities:

Sole Proprietorship

Sole proprietors can begin working for themselves without filing any official forms or registering their business with the state. It is the easiest business entity to form, operate, and maintain. The owner is in full control over the business and reports the business income and loss on his or her personal income tax return.

Ease, expense and simplicity of use
No additional tax return to file
General lack of business continuity
Inability to bring on new or additional owners
Potential financial danger resulting from unlimited personal liability in the event of a lawsuit

Partnership

A partnership consists of two or more individuals who wish to conduct business together. The partnership agreement governs the relationship between the partners. There are several different types of partnerships: general partnership, limited partnership, limited liability partnership, and limited liability limited partnership.

Flexibility of operation
Special tax allocations for partnerships, which enable partners to control and customize the advantageous allocation and distribution of profits and losses.
Potential for partnership disputes and disagreements
Accounting, tax and legal complexity

Limited Liability Company (LLC) Taxed as a Partnership

Small businesses deserve better results from bookkeeping and accounting functions. Outsourcing your accounting to us means you get all the benefits of a full-time on-staff bookkeeper, accountant — at a small fraction of the cost and without the hassle of recruiting, hiring, and managing.

Avoidance of certain restrictions that limit corporations
Like a partnership, an LLC usually benefits from members who contribute complementary skills
Potential for disorganization without a robust operating agreement
The LLC’s existence may end if one of its members leaves the company

C Corporation

In general, the main benefit of incorporating is to avoid personal liability for company debts. Corporations are subject to double taxation. The income from the business is reported and taxed on a corporate tax return. The dividends paid to shareholders are considered income and must be reported on the shareholders’ personal income tax returns.

Ease of transfer of ownership
Perpetual life
Double taxation on profits
Intense regulation with numerous state and federal controls

S Corporation

S Corporations combine the tax benefits of proprietorships and LLCs with the liability protection of C Corps.

 

Owners share the net business loss and can offset other income by reporting this loss on personal income taxes
Owners share the net profits of the business and report their share on personal income taxes
Inability to bring on new or additional owners
Paperwork is more complicated than the paperwork required for a LLC, but similar advantages

We are extremely proud of the pioneering services we provide. Our team of professionals will help to change your business forever.Robert Chambers, CEO

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