Business Entity Selection

One of the major issues facing closely held businesses is the selection of the entity of their company. Our team of advisors regularly provides the answers clients need to assist you in this initial important decision, working as a team with clients’ legal counsel to undertake a complete analysis of proposed operations, personal situation and goals.

Factors to be considered include: number of owners, number of employees, industry of company, amount of revenue, nature of business assets, history of litigation or potential for litigation, and the possibility of succession inside and outside of the family.

Typical entity selection options range from sole proprietorships, partnerships, limited liability corporations (LLCs), limited liability partnerships (LLPs), corporations, both S and C, and non profit entities. Each has its own special tax and legal implications.

For instance it may be beneficial for the sole owner’s company to be taxed as a sole proprietorship (Schedule C) but because of the nature of the business and number of employees, it may be better to take advantage of the legal separation provided by corporation status. The entrepreneur may not want the burdensome protocol of running the business as a corporation, so the answer may be to select LLC status which separates the business from other personal activities of the proprietor (like a Corporation) while the default tax treatment is that of a sole proprietorship (Schedule C).

Malin Bergquist’s CHBA group regularly deals with all of these issues. We have the talent and expertise to exceed your expectations in this specialized area.