Should You Incorporate?
If you have either already just started a business or in the process of beginning one, the decision on whether or not to incorporate and its related variables will be one of the most important financial decisions you ever reach. Although many financial pundits will encourage a one size fits all approach encouraging one entity type over another, it is wise to carefully consider and evaluate this decision as both your mode of operation, the availability of certain financial transactions, retirement plans, etc. will be greatly impacted. As not all transaction types are will suited for every entity type knowing what your business short term and long term plans are is the first step in a careful determination of your entity/incorporation type. For example many real estate developers, for a myriad of reasons, are well suited to be an LLC, LLP or partnership due to the flexibility of profit allocations and the movement/transfer of real estate from and to the business. However, as many of these variables/options will not be even a blip on the radar screen for a service, manufacturing, distribution, or wholesale business they may want to consider if an S Corporation might be the best course to pursue due to its profits only being taxed once as opposed to the double taxation of a C Corporation.
Sphere: Related Content