Time to review your business structure options
Abstract: As business owners gather their tax-related information and documentation, one major issue they may want to review is whether their business structure still best suits their company’s needs and situation. Many smaller businesses start life as a sole proprietorship or partnership, so the prospect of a business structure change often occurs when a company’s ownership decides to incorporate. This could involve a switch to a C corporation or an S corporation — or, to strike a balance between partnership and incorporation, a limited liability company (LLC). This article looks at the tax and liability ramifications of these various options, while a sidebar lists the considerations involved in the choice between a C and an S corporation structure.