Entity Selection and Start Up |
 |
 |
 |
|
During this critical phase, we assist owners with a host of decisions that have lasting tax consequences to their business. Choosing the legal form in which to operate the business dramatically impacts after-tax cash flow available to owners, affecting areas from personal liability to the deductibility of employer fringe benefits. Other crucial considerations may include the company’s overall method of accounting, its tax year-end, inventory valuation method and debt versus equity capitalization. As a licensed Certified Public Accounting firm, Apex CPAs & Consultants, Inc. can provide incorporation services by preparing your company’s Articles of Incorporation, file all applicable forms with governmental authorities and, if appropriate, elect S-Corporation status. What are my choices?The general choices are:
All states now recognize LLPs. Some states allow one-member LLCs or have special entity types for professional, such as the professional corporation or a similar professional-oriented variation of the LLC or LLP. First, consider how the choice will affect your relationship with co-owners, creditors, other contracting parties and various tax authorities. Most business owners see liability protection and tax reduction as the most important factors affecting entity choice. Liability protection may be obtained even if the selected entity is not a corporation. However, contract terms with lenders, suppliers and other parties may limit liability protection. Tax reduction strategies must consider the specific nature of the business operations, the desired relationship between the owners, business success plans and other factors that can affect the entity choice. Federal tax law applies uniformly across the United States, although its application may depend upon the nature of relationships established by local law. State law can affect many other entity choice factors, including which choices are available and the liability protections offered by each. |