Many self employed individuals believe that operating a business as sole proprietor is good for business. What they don't realize is that by operating a business as a sole proprietor they are liable for any and everything that the business is in debt for or if sued they are held personally liable as well. Having the right business structure is vital to any small business foundation for success. I would bet you to name one Fortune 500 company that operates as a sole proprietor. I guarantee you that you could not find one. That's because it doesn't make sense to do so. Business liability are for for the business not for the individual owner or operator of the business. There are many advantages of registering your business to operate under the right business formation or entity.
One advantage is having protecting from creditors who want to sue the business for what ever reason. By having a corporate structure you can shield yourself from any lawsuits. A limited liability company or LLC is a entity that successful small business like to use for liability protection. Depending on state law, the LLC will shield the managing member (s) from being personally liable from creditors.
Second advantage is being structured to operate as an c-corporation. A C corporation is regarded as a separate entity from it's owner. This is important because as a C-Corp for tax purposes you are allowed special tax deductions for tax purposes. You also have the limited liability protection under the c corp as well. Lots of tax savings and the ability to raise capital is enormous.
Finally, Building a solid business foundation also involves having a solid business credit profile. Seeking capital from a lender or investors will require you to be incorporated and registered under the right entity. Registering your business for asset protection purposes is smart for business. As stated previously you want to separate your personal assets from your business assets. Having the right business structure is beneficial for tax purposes too. This allows you to save on taxes which keeps most of your profits to re invest back into the business. Seek professional assistance to get set up with the right business structure for your business to succeed.
Al,
Al is a Enrolled Agent licensed to represent Taxpayers before all administrative levels of the IRS. Al is also a Business credit consultant helping Entrepreneurs and small business owners start and build business credit for their businesses. If you want to get more information about small business credit, asset protection and corporate taxes, you can contact Al at alplouis@gmail.com or follow him on twitter.com/alplouisea
http://www.businesscreditamerica.com/
1-888-821-6408 ext 2
No comments:
Post a Comment