{"id":1195,"date":"2016-10-10T08:34:37","date_gmt":"2016-10-10T13:34:37","guid":{"rendered":"http:\/\/cookco.us\/news\/?p=1195"},"modified":"2016-10-10T08:34:37","modified_gmt":"2016-10-10T13:34:37","slug":"choosing-the-right-business-entity","status":"publish","type":"post","link":"https:\/\/cookco.us\/news\/choosing-the-right-business-entity\/","title":{"rendered":"Choosing the Right Business Entity"},"content":{"rendered":"<p>When you decide to start a business, one of the most important decisions you&#8217;ll need to make is choosing the right business entity. It&#8217;s a decision that impacts many things&#8211;from the amount of taxes you pay to how much paperwork you have to deal with and what type of personal liability you face.<\/p>\n<h3>Forms of Business<\/h3>\n<p>The most common forms of business are Sole Proprietorships, Partnerships, Limited Liability Companies (LLCs), and Corporations (C-Corporations). Federal tax law also recognizes another business form called the S-Corporation. While state law controls the formation of your business, federal tax law controls how your business is taxed.<\/p>\n<h3>What to Consider<\/h3>\n<p>Businesses fall under one of two federal tax systems:<\/p>\n<blockquote><p>1. Taxation of both the entity itself on the income it earns and the owners on dividends or other profit participation the owners receive from the business. C-Corporations fall under this system of federal taxation.<\/p>\n<p>&nbsp;<\/p>\n<p>2. &#8220;Pass through&#8221; taxation. This type of entity (also called a &#8220;flow-through&#8221; entity) is not taxed, but its owners are each taxed (more or less) on their proportionate shares of the entity&#8217;s income. Pass-through entities include:<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>Sole Proprietorships<\/li>\n<li>Partnerships, of various types<\/li>\n<li>Limited liability companies (LLCs)<\/li>\n<li>&#8220;S-Corporations&#8221; (S-Corps), as distinguished from C-corporations (C-Corps)<\/li>\n<\/ul>\n<\/blockquote>\n<p>The first major consideration when choosing a business entity is whether to choose one that has two levels of tax on income or one that is a pass-through entity with only one level directly on the owners.<\/p>\n<p>The second consideration, which has more to do with business considerations rather than tax considerations, is the limitation of liability (protecting your assets from claims of business creditors).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When you decide to start a business, one of the most important decisions you&#8217;ll need to make is choosing the right business entity. It&#8217;s a decision that impacts many things&#8211;from the amount of taxes you pay to how much paperwork you have to deal with and what type of personal liability you face. Forms of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1197,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"apple_news_api_created_at":"2016-10-10T13:35:18Z","apple_news_api_id":"6f6cb6e9-1093-4ae7-883e-3aa9f21e3cdc","apple_news_api_modified_at":"2016-10-10T13:35:18Z","apple_news_api_revision":"AAAAAAAAAAD\/\/\/\/\/\/\/\/\/\/w==","apple_news_api_share_url":"https:\/\/apple.news\/Ab2y26RCTSueIPjqp8h483A","apple_news_cover_media_provider":"image","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_cover_video_id":0,"apple_news_cover_video_url":"","apple_news_cover_embedwebvideo_url":"","apple_news_is_hidden":"","apple_news_is_paid":"","apple_news_is_preview":"","apple_news_is_sponsored":"","apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"middle","apple_news_slug":"","apple_news_sections":["https:\/\/u48r14.digitalhub.com\/sections\/74d71b26-dfe2-3cf6-9b79-55911f8259f1"],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1195","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"apple_news_notices":[],"_links":{"self":[{"href":"https:\/\/cookco.us\/news\/wp-json\/wp\/v2\/posts\/1195","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cookco.us\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cookco.us\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cookco.us\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cookco.us\/news\/wp-json\/wp\/v2\/comments?post=1195"}],"version-history":[{"count":0,"href":"https:\/\/cookco.us\/news\/wp-json\/wp\/v2\/posts\/1195\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cookco.us\/news\/wp-json\/wp\/v2\/media\/1197"}],"wp:attachment":[{"href":"https:\/\/cookco.us\/news\/wp-json\/wp\/v2\/media?parent=1195"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cookco.us\/news\/wp-json\/wp\/v2\/categories?post=1195"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cookco.us\/news\/wp-json\/wp\/v2\/tags?post=1195"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}