Did you know that success is a combination of hard-work, determination and steps that make you grow? The same thing is for business. However, there is something you should know about the world of opportunities and profits: if you’re thinking about opening up your own company, or maybe you already have one, you need to know that hard-work and determination are not the only factors that lead to success.
The right and wisely calculated steps are one of those central elements when it comes to business success. And by the way, we’re not only talking about business decisions related to partnership, purchasing or selling products/services. Making the right decision also concerns the sphere of business formation – if you form your business right, you will become one step closer to your final goal.
Why Business Entities Are So Important
Thanks to the practice we have in the field of business formation! The thing is, choosing a business entity that does not match your needs and expectations will harm your business and lead to failures. Why? Because each business entity answers different questions and helps clients with different needs. This is why we at Prestige Auditors decided to help you by showing all the questions you need to ask yourself in order to choose the business entity of your dreams.
But before that, do you know what types of business entities exist nowadays?
To educate you, and at the same time to show that all we do is 100% truthful and professional, we decided to quote IRS and what it says about business entities: “most common forms of business are the sole proprietorship, partnership, corporation, and S corporation. A Limited Liability Company (LLC) is a business structure allowed by state statute.”
As you can see, there are mainly 5 business entities that you can choose from:
- Sole Proprietorship – “A sole proprietor is someone who owns an unincorporated business by himself or herself” – IRS
- Partnership – “A partnership is the relationship between two or more people to do trade or business” – IRS
- Corporation – “In forming a corporation, prospective shareholders exchange money, property, or both, for the corporation’s capital stock” – IRS
- S Corporation – “S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes” – IRS
- LLC – “A Limited Liability Company (LLC) is a business structure allowed by state statute” – IRS
How to Choose
We know, we know – making a decision is hard, especially when you have a variety of options like these! However, there are certain criteria that need to be maintained in order to make a decision. The questions are:
- What do you want for your business? Do you need to protect your personal liability? Why?
- To what extent you do you want to be flexible? Do you want to have complete control over your business, decide your working hours and place, or do you want some limits for your own sake?
- How much do you want to pay for your business? Have you thought about taxes? How do you want your business to be taxed? If you choose this or that business entity, how will the taxation affect your financial situation?
- Do you know anything about the costs of business entities?
- Do you think that choosing this business will bring you the expected profits?
Now go ahead and ask yourself these questions. If you already have the answers, then it’s the perfect time to have a very short but informative consultation with professionals like Prestige Auditors. Do you know why we are creating empires? Because we listen to our clients and know what exactly they want for their business and life.
However, this doesn’t mean that you can’t contact us when you don’t have specific answers. Our specialists will help you figure out your needs and expectations, after which we will be able to start the actual formation process. What’s more, while working with us, you will not only get an already created business: you will also have documents that are vital, especially when you have to deal with state bodies and authorities.
For more information about business formation, eCommerce taxation, Amazon tax exemption and other business- and tax-related topics, contact us!