As most people understand, one of the best ways learn new concepts is to have a short , to the point presentation through a question and answer format and that will be the format of the Steven H. Wilhelm, A.P.C. Blog
What are the basic business formats, i.e.: Can anyone list them ?
(Sole Proprietorship; General Partnership: Limited Partnership: Corporations-Subchapter S and C; Limited Liability Company and other Misc Groups and Associations.
Why should you not do business as a sole ?
A) Because you should want to separate your personal assets from business assets;
B) Another key reason to have an entity separate and apart from yourself personally i.e. a sole proprietorship, is that you want to have separation of business liabilities from personal liabilities;
C) Other items that are more readily facilitated you’re your business is in an entity format separate and apart from a Sole Proprietorship is that is helps with the transferability of ownership interest.
D) Yet another reason to have a business entity rather than a Sole Proprietorship is in relation to raising capital and again the efficiency of having the entity which is raising the capital being removed from your personal estate and or asset
E) And yet another benefit of doing business as an entity separate and apart from yourself, i.e. as something other than a Sole Proprietorship is the greater ease when it comes to the sale of the business.
Other advantages of being in a recognized business form separate and apart from the other asset protection issues are as follows:
A. less IRS and Franchise Tax Board audits are performed through the divisions that handle entities vs schedule C audits as confirmed by tax counsel associated with my company and ,
B. And lastly, many times when you have a company format in the form of an LLC (Limted Liability Company) , Corporation, or Limited Partnership it seems to add some CREDIBILITY to the viability of the business.
This presentation is only a cursory treatment of the subjects and our firm will be happy guide you through this maze of
Please see the accompanying cryptic chart of the entities and their various characteristics in summary form.