Saturday, March 7, 2015

Proper Business Organization


If you have decided to open a new business, make sure you do it right.  Consult with a professional to ensure that you have the best organizational structure for your type of business.  This will ensure that you are protected not only from personal liability if necessary, but also from paying too much in income taxes. 

Any individual who engages in an enterprise for the purpose of making a profit is a sole proprietor.  There is no special paperwork to complete, unless you 
are selling products and then there will be state and local sales taxes to deal with.

The same is true for more than one person who are joining together to make a profit.  This is now a partnership.  The same rules apply to a partnership as to a sole proprietorship, except the income tax forms that needs to be completed annually.

Many individuals have heard of the Limited Liability Company (LLC) and know that an LLC will limit liability so that if someone is injured by your business, there is usually a layer of protection to insulate your personal assets.  It is very important to seek professional guidance with this entity, because if the proper forms are not completed, the tax ramifications can be shocking at tax time.

S Corporations contain more strict record keeping requirements than an LLC, but offer the same level of liability protection.  If the record keeping is not kept up to date and properly, the liability protection an end up being stripped away because of the deficiency.

This time of year, there are a number of businesses that learn the hard way that they missed something when they were completing their initial set up. Even though you may have not initially completed the documents properly, not all is lost.  We can usually fix the deficiency before another year goes by.  Contact the office to schedule an appointment and I can evaluate your situation and offer you the best "fix" for your situation.

Law Offices of Angela Boeck-Giscombe P.C.
719-638-8877 For more information "Visit Our Website"