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Once you decide to establish a business, the business client's
first consideration will be the type of business organization
to use. Legal and tax considerations will help to determine
your final choice, as well as personal tax considerations
and the needs of the particular business.
Many small businesses operate as a sole proprietorship. Some
disadvantages include unlimited personal liability for all
debts and liabilities of the business, limited ability to
raise capital, and termination of the business upon the owner's
death. The firm will advise the client as to whether to form
an S corporation, C corporation, partnership or an LLC may
be a better alternative and cover the advantages and disadvantages
of the entity choice. The firm will assist the accountant
and business client with determining the shareholder's taxable
income and deductions and the effect of distributions. Before
the entity choice is selected, the business client must weigh
numerous factors. These factors include:
· Do the participants have personal assets they
wish to insulate from the risks of the business?
· Do the participants want their ownership interests
easily transferable?
· Will the participants allow earnings to accumulate,
or will they withdraw profits as they are earned?
· Do the participants want flexibility for distributions
and the allocation of income or losses?
· How in a potential incorporation of a particular
business affected by state laws?
For details, please contact Dorazio Law Group, P.C., at 724-934-6325
or email at info@doraziolawgroup.com.
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