Tax Considerations in Choosing the Proper Form of Business Entity

Founders of a new business typically realize early on that they need to conduct the business through a legal entity to limit their personal liabilities for the debts and obligations the business generates.  Often, the three entity types from which the founders must choose are the “C” corporation, the “S” corporation and the limited liability company (or “LLC”).  While all three entity types insulate the founders from personal liability, the differences among the three types for tax purposes may be substantial.  A C corporation, on the one hand, reports and pays tax on its income separately from its owners.  The income or loss of an S corporation or LLC, on the other hand, generally is reported by the owners on their personal returns.  The choice, therefore, is often tax-driven and requires an analysis of how the founders expect to grow and profit from the business.

Click here to read full article.

0 views

Recent Posts

See All

© Law Exchange International 2020

Web Design by

Web and Graphic Design near Grand Rapids

Contact

David Lindgren

secretary@lawexchange.org

Shakespeare House

42 Newmarket Road

Cambridge CB5 8EP

England

Connect with LEI

  • White Facebook Icon
  • White Twitter Icon
  • White LinkedIn Icon

Add on Facebook

Add on Twitter

Add on LinkedIn