CHOOSING A BUSINESS STRUCTURE

 

Legal and tax considerations enter into  your selection of a business structure.  Common business types are sole proprietorship, partnership, corporation, S corporation and limited liability company.  Your business type determines which tax form you will need to file.

 

Sole Proprietor-  An unincorporated business owned by an individual.

 

Partnership- Two or more persons are joined to carry on a trade or business.  Each individual contributes property, money, skill or labor, and expects to share in the profits and losses.

 

Corporation– Shareholders obtain stock in the corporation in exchange for money, property, or both.  Profits are taxed to the corporation and then taxed to the shareholders when distributed as dividends.

 

S Corporation-  A corporation that having met certain criteria elects to be treated as an S Corporation.  The shareholders report the S Corporation’s income, deduction, loss and credits on their individual returns.  The S Corporation is generally exempt from income tax.

 

Limited Liability Company– Statutorily authorized in certain states, this entity is characterized by limited liability for debts, similar to that of a corporation.  Management if by members or managers, and taxation is pass-through, similar to that of a partnership.


 

Click To Contact Jeanne Hudson To Discuss Your
Tax or Accounting Needs


Jeanne Hudson, CPA

Expert Tax Advice - QuickBooks Help & Consultation - Accounting 
Bookkeeping Services - Tax Reduction - IRS Appeals -
Tax Problems - IRS Tax Returns

409-737-9101    409-737-9110 Fax


 

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