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THINGS TO THINK ABOUT BEFORE CHOOSING THE FORM OF YOUR BUSINESS:

posted Aug 19, 2011, 8:12 AM by Liang Zhang



  • Taxes:
  • Beware of the different tax treatment with all entities. There are advantages and disadvantages in different forms of business. You need to know the taxation for each form so you can avoid double taxation and other unwanted consequences.  Let us assist you with the formation of your business. Let our expertise in corporate taxation help you with the formation of your business.

  • Cost:
  • A Sole Proprietorship, General Partnership, Limited Liability company, and Corporation vary in filing fees, tax liabilities, and other set up cost.

  • Growth:
  • Some business entities are limited as to the number of shareholders. This can limit your room for expansion.

  • Capital:
  • Review the requirements of all entities procedures for keeping records, distribution, fiscal responsibilities and process of raising funds.

  • Liability:
  • The risks and protections are from minimal to extensive for these different entities. Putting the liability directly on you will maximize the risk and may devastate you financially in business as well as in personal side.

  • Conformity:
  • As a business entity you may be required to obtain a business license, permit or register with the appropriate state in order to be in compliance. The way your form, structure and operate your business in one state may not be accepted in other states; and if you do not comply with individual state laws, you will lose your business rights.

  • Contracts:
  • Businesses are faced with a variety of contracts. Before entering into a financial commitment for leasing office space, warehouse, providing services, purchasing supplies, be sure it will fulfill your business needs currently and for the foreseeable future. Entering into partnership and by-sell agreements can be very complicated.

  • Control:
  • Your business entity can dictate the manner in which the business is operated. Choosing the wrong entity may make you personally liable for the wrong doings of employees and other partners.

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