(858) 614 1831
(858) 614 1831
(858) 614 1831
Do I need to incorporate?
Many business owners are bombarded with information and misinformation about the structure and taxation of a small business. There are many advantages to converting your existing business into a state recognized legal entity such as a corporation or an LLC. However, there are many things to take into consideration before you do. We always review each client’s business needs on a case-by-case business. What is right for one business, may not be what’s right for another. We will guide you in the right direction so you can determine if company formation is right for your business or if it is better to leave things as they are for the time being.
What is the difference between a corporation and an LLC?
This is actually a very in-depth discussion point. So much so that entire book series have been written on the subject. Let me outline a few key-points below:
-Corporations are governed by the Internal Revenue Code’s corporate tax rules
-LLC’s are governed under partnership tax rules
-There is no self-employment tax paid on the profit of a corporation, a member of an LLC generally pays self-employment taxes on all profits from an LLC
-Both corporations and LLC’s have the ability to make an “S” election for more favorable pass-through tax treatment
-Each state has specific tax and franchise tax rules that apply to each of these entities differently, it will take an analysis of the state your corporation will be based in to determine what these are
-Corporations must filed separate tax returns
-Single member LLC’s file and report their LLC income and expenses on either Sch C, Sch E or Sch F
What kind of services are included with our company formation?
To Learn more about an LLC
To Learn more about a Corporation
Taxes are never a fixed target. So even in the setup and formation of an entity for your business cannot take into account unknown variables and circumstances that may occur in the future. The IRS has made it very easy for business to convert their tax structure without having to start a brand new corporation or LLC all over. Even though the IRS has made the conversion process fairly simple, in regards to the filing of forms, there can still be some very complicated and tricky tax issues when a conversion happens. It is always important to analyze all of these tax and accounting issues before a switch.
Our practice makes it a policy to always review the corporate book when beginning a new business relationship with a client. There are countless stories of discovering that the professional or online service hired to form the company missed not only very key and integral pieces of the formation process, but even missed very basic and rudimentary pieces. There are cases where a well formed corporation has not had any tax plan put in place. In these cases, the corporation was set up correctly, but the client was reaping the benefits of the corporation that they had originally intended. We are able to work with our clients and get key missing components in place as well as polishing of the corporation with solid tax planning.
There are many instances where a business needs to close down and dissolve their corporation or LLC. We can assist in the proper way of dissolving and retiring companies. There are many important steps that need to be adhered to. It is not enough to just file an Article of Dissolution with the Secretary of State. It is also important to notify Federal, State and Local taxing authorities about the cease of business. If an entity is not dissolved correctly, ongoing penalties and taxes may accrue which may ultimately create a bigger headache and mess down the road.
Sometimes a business is unable to address or is unable to attend to the forms and fees associated with keeping an entity open and in good standing. Oftentimes Suspended entities can be brought back to life with something as simple as the filing of an information form and the payment of a small fee and penalty. If your corporation or LLC has lost its good standing status with your State, we can help identify the issue and rectify the situation.
To Learn more about Non-Profits and Charities
To Learn more about Non-Profits and Tax Exempt Entities