Which entity should you choose for your business?
- Corporation Yes No Maybe
- Partnership Yes No Maybe
- LLC Yes No Maybe
- All of the above Yes No Maybe
If you are a business owner looking for the answer to this entity question, read on.
This question often comes up while working with business owners who are starting a new business, growing their business and adding new locations and/or services, or are looking to take advantage of the ever-changing tax structure of the US. The entity you choose for your business can have tax consequences for years to come.
Choosing the best entity for your business is not a one size fits all answer. Friends, family, and business contacts may be quick to offer suggestions regarding a good choice. These suggestions are often based on their experiences. Consider researching the options to avoid this selection bias. You should find an accountant (CPA) and a business attorney who are well recommended, either by each other, or by another trusted source. Preferably, they will work together to guide you to the best choice. Choosing a good CPA and attorney is one of the most important decisions you will make as a business owner. It is even key to the survival of your business!
You go into to business because you are passionate about the venture that you are pursuing, to make money, and choose what you wish to do with your time, not to be buried in paperwork. Start your business out on the right foot (or left, if so inclined). Don’t be afraid to get the help you need. If you are going to invest your life savings (and years of your life), consult with experts that know the ins and outs of these questions.
When you speak with these “experts”, make sure that they take the time to listen to your goals. One of my favorite things to say to people is “I am not sure about the answer to that question, but I would be happy to research it and get right back with you.” I don’t feel uninformed when making this statement. I feel empowered by it. We cannot have all of the answers to every question, but taking time to listen is one of the most important lessons we can learn.
Kimberly D. Jones, Client Services Director