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Follow on Google News | Starting a Business - What to ConsiderBefore you start a new business, there are a number of preliminary decisions to be made. One of the first choices you will face is the legal form in which you will operate the business
By: Mitch Helfer Sole proprietorships, for example, are the easiest and cheapest business form to set up, and they can be operated with few formalities. However, they offer no personal liability protection and don't allow you to get many of the tax benefits that are available to corporate employees. Partnerships offer many of the same advantages and disadvantages as the sole proprietorship, but they allow the business to be owned and run by more than one person. Also, the liability problem can be overcome to a certain extent by forming a limited partnership, but partners whose liability is limited cannot be involved in actively managing the business. And losses from these partnerships may be restricted by the so-called passive activity rules. A newer form of entity, known as the limited liability company, which is approved for use in almost every state, offers what many see as the best alternative for the typical small business. These entities can be set up to be taxed as partnerships, avoiding the corporate income tax, while the managing members ‘personal assets remain fully protected from business creditors. S corporations also offer liability protection, without a separate corporate tax. Like partners and sole proprietors, however, more-than 2% S corporation shareholders are ineligible for tax-favored fringe benefits. Another potential drawback of S corporations results from limitations on the number and kind of permissible shareholders. These restrictions can limit an S corporation's growth potential and access to capital in some businesses. In others, however, an S corporation can be a key ingredient toward success. What about regular corporations, known as C corporations? Besides the question of choosing a form of entity or accounting firm for your new business, there are many other tax decisions to be made, and much planning to ensure that you meet your income and payroll tax reporting and compliance chores properly. How will you handle your start-up costs? Will your workers be employees or independent contractors? Please do not hesitate to call to set up an appointment for consultants services to explore these important matters further. With our experience, we can help you come to the right decisions and implement them quickly so that you can concentrate on the success of your new venture. http://www.cpamiami.com # # # CPA Miami is managed by Mr. Mitch Helfer ; a Certified Public Accountant (CPA) registered with the State of Florida since 1991, with two decades of experience combined, professional experience with various smaller-local, mid-sized regional and large-international public accounting organizations and financial institutions. End
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