Which Business Entity Should You Choose?
- Corporations and limited liability companies (LLCs) are preferred business structures because, unlike sole proprietorships and partnerships, both offer liability protection. This means that the owner of a company cannot be held personally responsible for the company’s debts. The personal assets of an owner are shielded from company liabilities (unless the owner signs a personal guarantee when they are acquiring financing for the company).
- If operational ease and flexibility are important to you, an LLC is a good choice.
- If you are looking to save on employment tax and your situation warrants it, an S corp could work for you.
What is the Different Between and S Corporation and a C Corporation?
S corps and LLCs are similar in that they are both “pass-through” entities for tax purposes; the income of these companies is passed through to their owners and reported on the owners’ personal income tax returns, thereby eliminating the double taxation incurred by owners of a standard corporation, or C corporation.
With a C corporation, the net business income is subject to corporate income tax, and the monies remaining after the corporate income tax are taxed a second time when they are distributed as dividends to its owners who must then pay a person income tax.
With a C corporation, the net business income is subject to corporate income tax, and the monies remaining after the corporate income tax are taxed a second time when they are distributed as dividends to its owners who must then pay a person income tax.
Experience
The Greene-Gretzinger Law Office provides assistance to individuals in reviewing business structures and in selecting the one that is best suited to their particular area. We are not a tax law firm and we do not provide tax services or support to businesses; however, as part of the entity selection process, one issue that must be taken into consideration is tax treatment.
- We file articles of organization for your LLC and other organizing documents as needed.
- We file articles of incorporation for your Wisconsin Corporations and other organizing documents as needed including by-laws.
- We provide up to date operating agreements with buy-sell provisions that help you avoid unpleasant situations down the line.
- We assist in buying and selling businesses and in transferring units of your LLC via gift or sale.
- We provide business support including contract creation, contract review and dispute resolution.
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