Helpful Tips for New Businesses

After many years of working with business owners like yourself, we have compiled questions and information that you will find helpful as you get your business off of the ground.

What type of business entity should I have?

There are several alternatives available to structure your business to meet the needs of your business owners.  Corporations and Limited Liability Companies offer a level of legal protection for owners.  There are also advantages from a tax perspective.  A common business formation is to incorporate and file and election to be treated as a Small Business Corporation (an S Corporation).  S Corporations generally pay no corporate tax and all of the items of income and deduction flow through to shareholders. This can be advantageous over a standard corporation or a sole proprietorship.  Limited Liability Companies and Partnerships have other advantages that corporations do not.  Again these entities are not taxed and income and deductions flow through to partners and members.  They are very flexible when it comes to distributions and allocations and are a good entity for real estate.  However, the income that passes through can be subject to additional taxes that income from a corporation is not subject to.  Your tax advisor should fully explain each of the pros and cons of each of these entities so that you know clearly which is best for your business.

Will I need a Federal Employer Identification Number?

The answer in most instances is yes. This depends mostly on two factors:

  1. If you have established any type of entity other than a sole proprietorship, you will need a Federal Employer Identification Number
  2. If you have employees, you will need an Federal Employer Identification Number
What tax forms do I need to file when I start my business?

When you start your business, you will need to File Form 2553 if you are establishing an S Corporation, a Form SS-4 to get your Federal Employer Identification Number, and you will need to file several forms with your state in order to establish payroll identification numbers with the states in which you do business.

If you are starting a new business and have further questions then contact us at 770-753-9000 for more information – or fill out our online contact form and we’ll gladly contact you.