What is the best business structure for my business?

Get Legal Help Today

 Secured with SHA-256 Encryption

What is the best business structure for my business?

Hi,

I am planning on having a holistic center in San Francisco
and I would be hiring 2/3 people from India, a teacher and
an advertizing agent, so what is the best business structure
for my business?

Asked on June 27, 2017 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

An LLC, in which you opted for "pass through" or "partnership" tax treatment, is the best option: 
1) Both LLCs (limited liability companies) and corporations provide liability protection: they protect your personal assets (e.g. your home; money in the bank) from most business-related debts, obligations, and liabilty. (Most, but not all: no protection is perfect, and there are exceptions to the protection.)
2) To avoid "double taxation" (paying taxes at both the business level and again when you are paid by or take distributions from the business), you want the "pass through" or "partnership" tax treatment (which is also called a "disregarded" entity), which means you are only taxed once; profits are taxed as part of your personal income, and losses become business deductions you can take on your personal income tax return. LLCs or one kind of corporation, the subchapter-S corporation (also called an "S-corp") can give you this beneficial tax treatment.
3)  LLC involve less paperwork, less formalities, and less reporting than corporations, making them a better choice for small businesses--they are, quite simply, easier.
So you want an LLC or corporation for liability protection, and you want disregarded entity tax treatment, which you can also get with either an LLC or a corporation (sub-S corporation), but an LLC will be the easiest way to go, with least paperwork.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption