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.
Businesses that do not register otherwise are automatically considered to be sole proprietorships. The perks include:
Now, for the drawbacks:
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.
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.
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:
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.