The formation of a business is a crucial time that determines many legal and tax outcomes. You want to be sure that you are choosing the right way to form your business, and using a lawyer skilled in large and small business formation is crucial. Business structures can be used to secure financing and impact taxation, record-keeping, and liability. There are many documents that need to be prepared and kept current in the formation of a business, and Katz Law Firm would love to use our expertise to help you in your next business venture. Business formation can include:
- LLC: An LLC is a limited liability company that separates your business from your personal liability. An LLC combines characteristics of corporations with the tax structure of a sole proprietorship. There are many advantages to forming an LLC, including the protections associated with corporations, but there are drawbacks to consider as well. Unlike a corporation, an LLC has to be dissolved upon the death of a member, so future financial planning is important to consider when forming an LLC. Have a skilled attorney assist you in deciding whether an LLC is the best choice for your business.
- LLP: An LLP is a limited liability partnership that has elements of a corporation and a partnership. In an LLP all partners have some form of liability that is similar to shareholders in a corporation. An LLP differs in tax liability from a corporation, which is why you want the assistance of an attorney in deciding if this is the right business formation for you.
- C-Corporation: Most for-profit corporations are automatically classified as C corporations. Within these corporations, the business is taxed separately from the owners, and there is no shareholders limit. There are certain tax advantages to a C-Corporation, but there are also a good amount of start up fees and paperwork
- S-Corporation: S-Corporations are similar to C-Corporations in many ways, but the biggest difference lies in the taxation. S-Corporations are considered pass-through tax entities that do not pay tax at the corporate level. The profits or losses are passed through to the shareholders and filed on a personal return. Because there are so many similarities between S and C-Corporations, it is important to get legal advice before deciding on a formation.
- PC: A Professional Corporation is how many business owners choose to incorporate in the fields of accounting, medicine, engineering, and architecture. A Professional Corporation can help protect your personal assets against any lawsuits. Professional Corporations are usually taxed like C-Corporations.
As you can see, there are many options when choosing how to form your business, and each choice can lead to different taxation and liability. Having legal counsel is crucial in the early stages of business formation. Whether you are choosing to form an LLC, S-Corporation, or a Family Business Entity, Katz Law Firm can help. We can not only help you form your business, but advise you on wealth-transfer planning and asset protection so your financial business gains are protected. Contact us today to get started helping your business grow and prosper.