It is important that business owners select the best tax entity for their business. Discuss one or
two reasons why partnerships or limited liability companies are often a better choice for a new business
than a C corporation or a S corporation.
Write an initial post with at least 300 words
Respond to two classmates posts. Cites all three works and titles
- Why are partnerships or LLCs a better choice for new businesses compared to C & S corporations?
When starting a new business, business owners face choosing a legal structure. The ultimate choice comes down to taxation, complexity and cost, and the liability protection of the owner's assets.
Partnerships are easy to set up and administrate. They are also flexible and require no payroll work if no employees exist besides partners. The downside is that owner's assets are usually not protected unless formed as an LLC.
With limited liability companies, owners choose how to identify themselves for tax purposes. Limited liability companies usually file as a partnership for federal tax purposes. The benefits that come with an LLC are the owner's assets are safe from lawsuits, simple to administrate, and have lots of flexibility that allow future changes of the entity.
Partnerships and limited liability companies are not subject to double taxation while a C corporation is. The cost for partnerships and LLCs is moderate, while on the other hand, C and S corporations are higher.
- What are some of the advantages of forming a c