Business formation in 2018 has become much more complex as many try to unlock the changes in the federal tax code. Pass through income appears to provide an advantage to S Corporation elections, but is this the best option for your new company? Should existing C Corporations consider the S Corporation election? The primary questions will center upon the nature of the business itself, the work product of the corporation and the nature of the primary shareholder or shareholders. Professionals and those who rely upon their own creativity and professional skill may not be able to take advantage of the proposed pass through advantages.
An LLC is still an attractive option, especially for sole owners and small businesses. However, the decisions associated with cross-border, national and international business transactions must be balanced by the tax implications of how and where income is realized. The selection of a business entity has become much more legally challenging and simply downloading forms from a legal website will not provide the protections the majority of new business owners are seeking.
Your business entity exists to protect the owners, members or shareholders from liabilities associated with the business entity. The supporting documents such as the LLC operating agreement or the shareholder’s agreement become more critical both in terms of control as well as the distribution of income. Should you select an LLC, S Corporation or C Corporation? The California Professional Corporation or PC is still an attractive entity for those in the medical or healthcare industries. The experienced business formation attorneys at the Watkins Firm are well positioned to provide sound advice and business counsel in these uncertain times.
We invite you to review the recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a free consultation. Learn about the many options and clauses associated with template forms and why it is so important to have sound legal advice and counsel when approaching business formation in 2018 and beyond.