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Business Entity Selection

Eenie-meenie-miney-mo – which entity to choose? This can be one of the most important decisions that a new business makes. Each entity type has its pros and cons. The choices available are generally Sole Proprietor, Partnership, Limited Liability Company (LLC) or Corporation. Your choice of entity will depend on several factors. Do you need liability protection?  Do you want to avoid paying Social Security and Medicare on all of the net earnings?  Are you comfortable making estimated tax payments? Once you think you have made your decision on the appropriate entity, you may still have more decisions to make. For instance, as an LLC, will you have partners or will you be a single-member LLC?  Will you decide to make an S-Corporation election? What in the devil is an S-Corporation? An S-Corporation generally pays no entity level tax, as all of the net income is “distributed” to the shareholders and taxed on their personal tax returns. These are all significant decisions and mistakes can result in higher tax costs. For the past 36 years, Burdette Smith & Bish has been assisting its clients with making appropriate entity decisions. Our goal is to provide our clients with all of the necessary tools to determine what entity choice makes the most sense for their business. We look forward to helping you with not only choosing the appropriate business entity, but also how to best use the entity to minimize your tax liability.

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