Certified
Public Accountant
(281) 335-4974
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Important Dates To Remember Aug 1, 2011 - 2nd Quarter Payroll Reports Due Sept 15, 2011 - Extended P/S & Corp Tax Returns Due Oct 17, 2011 - Extended 1040's Due |
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LLC’s Corporations
and Partnerships Which type of entity is right for your business? Determining how to structure your business can often be a monumental task. There are three main types of business entities to choose from. They are a Limited Liability Company (LLC), a Corporation, or a Partnership. A Sole Proprietorship is the least desirable since it results in the most taxes being paid. The least complicated of the three entities above is the LLC. This is the newest type of entity and is recognized in all 50 states. As an LLC, you can choose how you want to be recognized for tax purposes: as a single member sole proprietor, as a Corporation, or as a Partnership. A C Corporation is a good form of entity to choose as it allows you substantial tax savings. It is more complicated to set up than the LLC. The only disadvantage of a C Corporation is the double taxation of income. The Corporation is taxed on its income and then if dividends are distributed to Shareholders, they are taxed as well. As you can guess, it would be wise not to distribute any dividends. A Partnership can come in many shapes and forms. The very best type of Partnership is the Limited Partnership. This is different than a Limited Liability Company. A Limited Partnership has one general partner and as many limited partners as is desired. The limited partners have the best tax advantage of all entities because they do not pay any self employment tax. This is a 15.3% tax savings over any other form of business. As you can see, it will take some careful planning to decide which type of entity will be best for your business. Downloads: Benefits of IncorporatingEntity Comparisons for Business Record Keeping & Payroll Tips
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