I hope to educate small business owners on the benefits of properly structuring your entity before you begin your business venture. It’s an easy process if you plan accordingly. Consult with the right people and get good advice on your overall strategy and your entity will offer you liability protection as well as a host of tax advantages that are being wasted.

When you talk with you accountant, legal adviser or entity former make sure you understand what you are asking them to do. If you say that you want a corporation setup then that’s probably what they will do. If you say that you want an entity setup, then it’s a broader question and they will dig deeper to find out which type of entity structure you need.

A few of the benefits of corporations are primarily liability protection and tax savings. Liability protection is important because people are suing everyone these days and if someone slips and falls in your office, they could sue you for it. If you don’t have a properly structured entity in place, they could come after your personal assets instead of just the business assets. Tax savings is also a huge benefit

All states recognize the Limited Liability Company as a legal business entity. These entities are very easy to setup and most states have online portals to file them yourself. If you are unsure how to go about filing it, consult with a tax accountant or attorney and they will complete these steps for you.

Sole Props are easy to form. It literally is a simple as saying you are in business, going to your local city offices and getting a business license. The other form of business entities cost money to form and sole props don’t with the state. If you want to setup a DBA with the state then there will be a small fee. This is by far the easiest way to role for small businesses that don’t have the budget to fully incorporate in the beginning.

With Corporations and Limited Liability Companies, you are literally creating a separate entity from which to operate your business. Having a stand-alone entity is a smart way to operate if you are trying to raise capital from investors or banks.

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