Careful business planning is the key to helping your business be profitable and continue to grow over time. A winning combination of financial management, operational support and strategic planning will help you make smart financial decisions that will benefit your business in the years to come. I offer the following financial advisory and business consulting in Rigby ID for existing and new businesses:
Existing Business Services
New Business Services
Business Entity Selection - Which One Is Right For You?
I assist my clients in making informed decisions about entity formation that will support their business goals. It is important to start a business with the end in mind because each entity type has tax advantages and disadvantages that must be considered before making a decision for your business. Below are various entity types:
Sole Proprietor (Schedule C)
The simplest form for a business. The owner is a self-employed sole proprietor and reports all income and expenses on Form Schedule C with the owner’s personal income tax return.
An organization consisting of at least two partners operating a business jointly. The entity can be either a general partnership or a limited partnership. Limited partnerships can be used to reduce individual liability for the operations of the partnership. A partnership is not a separate taxpaying entity. The partnership files an income tax return and the income and expenses are allocated to the partners for inclusion on their income tax returns.
Limited Liability Company (LLC)
An LLC is similar to a limited partnership but can be formed by a single owner. The owners or members of the LLC are shielded from personal liability for the obligations of the LLC. The LLC may be taxed as a disregarded entity (single member – schedule C), a partnership or a corporation.
Corporation or S-Corporation
A corporation is a separate legal entity. Its owners or shareholders have no personal liability for the obligations of the Corporation. The primary disadvantage of a traditional corporation, C corporation, is double taxation since tax is paid by the corporation on income and again when shareholders pay income tax on dividends. To avoid double taxation, corporations that qualify can make an S election to be taxed only once. These corporations are known as S corporations.