Your options for entity formation are varied; and each of these choices has unique federal tax treatments for the entity itself and its owners as well as unique operational characteristics and requirements. In many cases strict statutory and regulatory adherence is absolutely necessary to preserve the integrity of the entity or operational form chosen.
What this means is that decisions made at the time of the creation of a business entity (whether the entity takes the form of a sole proprietorship, traditional corporation, limited liability company, partnership or one of several hybrid forms), will — without question — impact the day-to-day operations of the business. In addition, they have
an impact on the federal tax obligations by its owners. Such things as the subsequent ability to transfer ownership, compensation for key individuals, provision for employee benefits, and frequently unforeseen future business issues also come
into play.
You need the trusted advice of professionals in financing, corporate governance and management to sort these issues out. But perhaps the single most important element, from concept to completion and throughout the lifecycle of your business, is the need for focused attention on methods, techniques, structures and documentation of the operations coupled with the varied activities and dynamics of your business. An experienced and objective advisor can save you time and money by doing it right the first time.