Since beginning our Start-Up School, the topic of business formation once again brought itself to the forefront, reminding us of just how important it is that entrepreneurs and freelancers understand how their businesses’ status affects them. Not only are taxes impacted by the business’ status, but there are huge liability issues at play also. This isn’t a topic to be taken lightly, since there’s so much at risk.
We have a tremendous amount of experience in helping clients choose the best entity type, matching tax, liability and cash flow concerns against the compliance requirements for each type of entity. For instance, sole proprietorships file their business information on Schedule C along with their individual tax return. Most partnerships and all corporations must file a separate tax return, resulting in added cost to comply with the requirements. As you read through the comparisons, we tend to see most business owners elect one of the following business entity types:
Do you have questions regarding buying vs. leasing? This attachment also addresses those questions. We get this all the time when clients are looking at business autos and new office equipment.
Have you ever wondered if your business plan was really necessary? We have the answer for that as well!
We feel that any start-up should pay close attention to this information. Of course, any decision regarding business status should be discussed with a CPA and an attorney if possible. We’d be happy to discuss any or all of these items further!
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