Business entity distinctions have wide-reaching implications affecting everything from legal protections to tax considerations. Furthermore, differences in startup and maintenance costs can vary substantially, as can flexibility in ownership structure. These elements affect both the business’s initial formation and daily operations, making them vital considerations for any new business owner.
Understanding the differences in the six types of business entities is an important first step in starting a new business. While some business types are categorically different than their counterparts, others have more nuanced differences between their startup requirements and ongoing regulations.
Because of last year’s tax reform legislation, the IRS recently sent a notification which said “Some S corporations may want to convert to C corporations”. Issue Number: Tax Reform Tax Tip 2018-179. This can be a complicated topic and you should not take anything for granted or make decisions based on an IRS tip. (Though the tips can be helpful.)
If you are about to set up a new business entity or have been advised to convert your company to a different entity, you will likely require different bookkeeping and accounting procedures. We can help! Contact us here >
The content of this article is for general information purposes only. It is not intended to be accounting, tax, or legal advice. Consult with your attorney for specific recommendations for your circumstances.
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