PBS
IF YOUR OUTGO EXCEEDS YOUR INCOME
THEN YOUR UPKEEP WILL BE YOUR DOWNFALL!
WHAT IS THE RIGHT ENTITY FOR YOU?
SOLE PROPRIETORSHIP:
+ The taxpayer is subject only to individual tax rates
- The taxpayer is exposed to business liabilities
C CORPORATION:
+ Liability is limited to business assets
+ Lower tax rate than the maximum individual tax rate
- Distributed income taxed at corporate and individual levels
S CORPORATION:
+ Income or loss passes through to shareholders, avoiding double taxation
+ Liability is limited to business assets
- There are limits on electing and retaining S status
GENERAL PARTNERSHIP:
+ No limit on the number of partners
+ No double taxation
+ Income may be allocated to partners in any reasonable way
- Each partner is subject to business liability
LIMITED PARTNERSHIP:
+ No limit on the number of partners
+ No double taxation
+ Income may be allocated to partners in any reasonable way
+ Limited partners are not subject to business liability
- Taxable income may flow through to partners when no cash has been distributed to pay taxes
- In some circumstances, the limited liability provision may not be enforced by the courts
LIMITED LIABILITY COMPANY (LLC):
+ No fear of loss of limited liability for the owners
+ No limit to the number of partners
+ No double taxation
+ Income may be allocated to partners in any reasonable way
+ Limited partners are not subject to business liability
- Taxable income may flow through to the partners when there has been no cash distributed
to pay taxes
THIS INFORMATION HAS BEEN PROVIDED BY:
AIPB (AMERICAN INSTITUTE OF PROFESSIONAL BOOKKEEPERS)
PROFESSIONAL
BUSINESS SERVICES
BUSINESS SERVICES
professional office for the growing business
TIDBITS:
860-621-3687
more than 23 years
of experience
+
+
