Business Formation and Incorporation
There are many ways to organize or form a business, and many different benefits to each type of entity. Among the many factors to consider, two of the primary considerations pertain to liability protection and taxes. Forming a business as an LLC or Corporation provides “limited liability” protection, which shields the owner’s personal assets from the liabilities of the company. It also protects the company from the personal debts of the owners, and from the conduct of other owners.
Certain entities handle taxes differently. A traditional Corporation is subject to double taxation, at both the corporate and personal levels. However, LLCs and S-Corps offer “pass-through taxation” and are taxed only once at the personal level. Other considerations can include how many people will own the company, management structure, the ability to take on investors or sell the company down the road.
A final determination will depend on the business owner’s specific goals, strategies and preferences. At Salman Law, APC we can help assess the business issues, and develop a formation strategy to limit the risk of liability and maximize operational efficiency.