Structuring for success: Business formation consulting in Rancho Cucamonga

We at Whyte & Associates in Rancho Cucamonga strive to position your business for success from the get-go. Our accounting and tax professionals know the implications of those simple letters, “Inc.” and “Corp.,” as it relates to your personal and professional financial health. Our trusted consulting services include expertise on business formation and how to structure your fledgling venture for success. 

Sole proprietor

Businesses that do not register otherwise are automatically considered to be sole proprietorships. The perks include: 

• There isn’t a mountain of paperwork to wade through.
• You still get a trade name. 
• You are 100% in the driver’s seat. 

Now, for the drawbacks: 

• Creditors can seek payment from your personal assets. 
• There is a considerable risk because your personal property may be on the line in the face of bankruptcies and legal action.
• Raising capital can be a challenge. 

Limited Partnership, Limited Liability Partnership

LPs generally have a partner with unlimited liability and other partners with limited liability and, in turn, limited control. For LLPs, each owner has limited liability and is protected from partnership-related debts and lawsuits. They won’t be held financially or legally responsible for the other partners’ actions within the LLP. 

Limited Liability Company

While the structure of the LLC also has built-in protection from personal liabilities, its members are “self-employed” in the eyes of the Internal Revenue Service. So, they pay Medicare and Social Security taxes. A member’s exit or addition to the LLC may require that the company be dissolved and reformed. 

C-Corps 

Corporations also exist as legal entities separate from ownership. The corp is taxed and may be held responsible for legal action against them, unpaid debts, and other credit matters. Associated costs, records, and reporting requirements are substantially higher than the other options to structure your business listed here. The corp can be taxed twice (income tax on profits and when dividends are paid on personal tax returns); however, benefits include seemingly ubiquitous sources of capital, as the corporation is attractive to outside investors and other partners. Options include: 

• S-Corp, profits and some losses may be passed through an owner’s personal income without being subjected to corporate tax rates
• B-Corp, a “benefit” corporation or for-profit that documents its public benefit and contribution to the overall public good
• Close Corp, a smaller B-Corp with a more loose corporate structure (i.e., can be run by small shareholder groups, less a Board of Directors)
• Nonprofit, 501 (c) (3) refers to the tax code and the corp’s tax-exempt status based on its respective charitable, religious, literary, scientific, and educational mission. 

Co-op

This entity is owned and operated by those who benefit from its services. The profits that are generated are distributed among member-user-owners. 

The implications associated with structuring your new venture are numerous and often more than meets the eye. We at Whyte & Associates leave no stone unturned to ensure you are well-informed on the best options to get your operations off to a strong start. Call us at (909) 575-0080 to schedule your appointment. 

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