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episode 40 – maximize your equity: maintain the right business entity
How much thought did you put into how your business would be structured. Did you consider whether economic conditions would be more favorable if your company operated as a LLC (Limited Liability Company), C Corp or S Corp? Were the tax implications weighing heavily on your mind as you wrestled with this important decision? Your business’s structure is not a decision to be taken lightly and Gene Spittle, CPA, PFS, CGMA, a principal at Rea & Associates, will tell you why on this episode of unsuitable on Rea Radio.
On this episode, Gene talks about various forms of business entities and why structure is so important. He will also weigh the pros, cons and general challenges associated with making the transition from one entity to another. Specifically, listeners will learn more about:
- The popular LLC option, which effectively limits an individual’s liability to any investments, debts or loans that are personally guaranteed.
- The costs and tax ramifications generally associated with switching from a C Corporation to an LLC.
- Why some owners may want to transition their business from an S Corp to a C Corp for tax purposes and why certain assets, such as real estate, should be managed outside of the C Corp.
- The benefits of operating as an S Corp and why timing the structure of your business can be incredibly beneficial.
- The role succession planning plays on an owner’s desire to restructure their business and how doing so can help you avoid huge corporate taxes.
This episode will benefit business owners in all stages of their careers and will help illuminate solutions to challenges regularly faced by entrepreneurs like you.
articles & insight
Want A Better Business? Structure Matters – Are you an entrepreneur who wants to take advantage of the benefits often awarded to small-to-midsize business owners? If so, you may want to consider establishing a limited liability company or an S-corporation. Both options offer several distinct advantages depending on the size and scope of your business and it’s even possible to combine the two – potentially providing you with the best options of both worlds. Read on to learn more.
Don’t Let Your Entity Formation Put You At Risk – Having the right entity structure is one of the most strategically important business decisions you can make. Unfortunately, the topic usually doesn’t come up until it’s clear that the entity structure is a problem. Read on to find out why.
Is It Time To Review Your Choice Of Entity – When is the last time you talked to your accountant about your business’s entity type? If you’re like most business owners, it’s probably not something you regularly think about. Whether you are taxed at the corporate level as a C-corporation, or have a pass-through entity such as an S-corporation or a limited liability company (LLC), there have been plenty of changes in the tax laws recently to warrant at least considering your entity type. Check this article out to learn more.
Tax-Free Stock Options Exist For Some Small Businesses – Back in the early 90s, Congress passed a tax provision designed to increase investment in America’s small businesses. And while the provision’s name, IRC Sec. 1202, may not roll off your tongue very easily, it’s one that some small business owners need to know. Read on to learn more.
Can Changing My Business Entity Improve My Tax Treatment? – If you plan to sell the company more than 10 years from now, and if you expect to experience profits, you should consider how the profits will be used. Will they be reinvested in the business, distributed to owners or to pay down debt service? And if your company expects to see losses, you must think about how quickly the business will use up its basis, and at what point prolonged losses in a flow-through entity will no longer provide economic benefits to the owners. Keep reading to learn more.
Click here to read the official transcript for episode 40: “maximize your equity: maintain the right business entity.”