Incorporating in Georgia…Determining if an S Corporation or LLC is Best for Your Business

Incorporating in Georgia…Determining if an S Corporation or LLC is Best for Your Business

Incorporating in Georgia is still the most important decision for all initial business owners. If you have developed your business model, written your business plan, and are now ready to set about the task of actually beginning your business you will want to take care of this critical tax step. Although you are not indefinitely locked in to a entity choice as an LLC or a C Corporation can elect to be an S Corporation and an S Corporation can become a C Corporation, you initial election is most apt to be the most critical business choice you can make.

While being an LLC or LLP can be most advantages for a law firm or multiple physicians practice, these selections will generally pay more in taxes than an S Corporation as all of their net earnings are subject to FICA/Medicaid taxes while only ones W-2 from an S Corporation would be. I would suggest all multiple physician practices greatly consider the advantages of an LLC or LLP can bring as professional liability statutes allow them to be responsible for professional liability. However a normal tort issue/civil liability cannot be assessed personally so these same concerns will not be of importance to a retail, commercial, wholesaler, distributor, etc. as they would not be subject to professional liability statutes. Real estate ventures are often well suited to considering whether being an LLC, LLP, or partnership might be in their best interests as you can move real estate both in and out of these entities without any gains being recorded and taxed.

For those looking to consider setting up an S Corporation there are four basic requirements which include being an U.S. citizen or registered alien, having one class of stock, having a calendar year-end, and having less than 100 shareholders. S Corporations continue to be a popular choice among many who do not need/have to be another entity type because of the nature of their operations or needs.

Incorporating is not for the faint of hear so be sure to consult with your CPA to get started as well as periodically to ensure that the entity selection you are presently using is best for you and your business, your tax bill, and legal liability limitation issues.

To read more and see which entity type is best for you visit  A Christian CPA Firm in Duluth GA Proudly Serving Suwanee, Lawrenceville, Snellville, Lilburn, Duluth, Norcross, Peachtree Corners, Atlanta, Gwinnett, Fulton, Johns Creek, Roswell, Forsyth, Flowery Branch, Buford, Cumming,  Alpharetta, Dunwoody, Sandy Springs and Tucker as a Faith Based CPA Firm


Leave a comment