Starting a business right from day one is important to reduce financial and regulatory risks. This is not taught or spoken about as much as should be. Many want to be the next successful entrepreneur in real estate, retail, or software for example, but can get in trouble if they don’t take a couple steps.
If a business starts bringing in sales, and gets sued, the 3rd party might come after your personal assets if a LLC was not setup. The business needs to be a separate legal entity from the owner of the business. If the business owner is mixing personal funds with business funds, the owner’s personal funds might be at risk.
Simpson & Simpson can assist in setting up your business with the right legal and tax entities, help you file all the legal forms with the proper authorities, and help create a start-up plan.
As an example, a LLC with a S Corporation designation for tax purposes, is believed by many professionals to be the best of both worlds for small to medium size companies. It combines the flexibility of a LLC with the tax benefits of a S Corporation.
Simpson & Simpson has saved companies thousands of dollars by advising on filing the S Corporation designation and staying compliant with the stringent S Corporation guidelines. Here is a chart showing the basics of how the LLC with S Corp designation saves on taxes compared to the straight LLC.