We at Whyte & Associates, Inc. are privileged to provide a range of services to support organizations throughout the Inland Empire. Many of the functions that help your business operate as efficiently as possible spring from a single yet essential conversation: how to incorporate your enterprise. The types of incorporations in Rancho Cucamonga, CA, and elsewhere each have their unique benefits and caveats.
As an owner, you will enjoy “limited liability” for the organizations’ debts and other liabilities. Additionally, the business’s profits and losses may be allocated to owners differently than how ownership interest is allocated. For instance, an owner with a 10% interest can be granted 30% of its profits. You and other owners have control over how the LLC is taxed (as a partnership or corporation). When compared to sole proprietorships or partnerships, the LLC can be more costly to form. However, it is important to consider the long-term value of incorporating as an LLC. So, this might be a nominal upfront concern.
Akin to an LLC, as an owner, you enjoy limited liability for debts and judgments. Additionally, as an owner, the net profits are shared among the other owners. Your “share” is reported on personal income taxes. You and other owners also share in the net loss. Other income may be offset by reporting the loss on personal income taxes. This arrangement, too, can be more costly upfront than sole proprietorships or partnerships. Paperwork is generally more complex; however, you leave those complexities to us. Unlike with an LLC, incomes from the business profits are derived by the interest you have in the business as an owner. Some benefits are only applicable to owners with more than 2% of the corporation’s shares.
When a small business incorporates, it is automatically a “C” corporation or “regular” corporation. You have limited liability for the likes of debts, and some benefits can be deducted as business expenses. With good accounting by your friends at Whyte & Associates, you may be able to avoid higher taxes on the business by splitting profits across the ownership. Like S-Corps, C-Corps are generally more expensive and complex to establish than their sole proprietorship and partnership counterparts. The corporation must also pay its taxes (as a separate tax entity).
We look forward to meeting with you to help determine the best foundation for your organization to build upon. Call (909) 575-0080 to schedule your appointment with one of Whyte & Associate’s seasoned accountants in Rancho Cucamonga, CA.