The Right Business Entity for You
How you organize your operations makes a big difference to your bottom line. The same holds true when structuring your business.
While you can’t prepare for every eventuality, putting the right systems and plans in place to help your business face the most difficult ones just takes a little work. That begins with your business structure. Choosing the right one could save you money in the long run. And that matters for your bottom line.
Deciding factors for company structure include personnel, products, funding, profitability, and asset protection (to name a few). And this is where we come in… we’ll look over your financials and advise you on the right structure for your Tampa business.
About business entity types
Sole Proprietorship
Most Common
Inexpensive to form
Complexities with obtaining future capital for expansion projects
Liable for the company’s liabilities, debt, and losses
Pay taxes quarterly through self-employment tax
Partnership
Types:
- General partnerships: Two or more co-owners
- Limited partnerships: One general and one limited partner
- Limited liability partnerships: Owners aren’t held personally responsible for the debts or other partners’ actions
- LLC partnerships: Two or more owners who are called members and whose personal assets are protected.
Personal financial liability and profits diffused
Report income, deductions, gains, losses, etc. from operations on annual filing.
20% deduction on QBI (*in some cases)
Limited Liability Corporation (LLC)
Separate legal entity that protects its members from personal liability for business doings.
Registration costs = low to mid-three figures
Domestic LLC with at least two members is classified as a partnership for federal income tax purposes unless it files Form 8832 and elects to be treated as a corporation.
Corporation and S corp
A corporation is a separate taxpaying entity that can elect to be taxed as a pass-through entity.
S Corp: Limited shareholders. Pass corporate income, losses, deductions, and credits through to shareholders, who report the “flow-through” of income and losses on their personal tax returns. FICA taxes for salary compensation to owners and not on the remaining profits.
C Corp: Owners are taxed only on the amount of earnings they receive as dividends — not the earnings the corporation retains. The company is taxed on income and any additional profits left over and distributed to shareholders (usually as dividends) and subject to personal income tax.
Nothing’s simple in business, but we can help with this.
Request a FREE Consultation to look over your business entity structure, and we’ll help you decide which one is right for your company.