As a business owner, you probably put a lot of thought into what products to offer, how to introduce them into the marketplace, and how to keep your receivables greater than your payables. All these things will have a major impact on your success and longevity as you move forward.
But That isn’t All
Aside from the obvious, there are a host of equally important business elements to consider. For example, you’ll need to decide what type of legal structure best fits the needs of your business and your personal priorities. Anyone starting a business or dealing with changes should consult a qualified expert on business entity structuring. They can help you decide:
- How to structure your business for the greatest tax benefit
- Which legal structures offer the most protection from liability
- When and if your legal structure should be modified to adjust for growth
The world of business entity structuring can be complicated. Most people don’t fully appreciate the legal complexities – and potential pitfalls – of running a business. While you certainly shouldn’t let that stop you from pursuing your dreams, you should make sure all your legal ducks are in a row.
Considerations for Entity Restructuring
Everyone wants to put themselves and their business in the best legal position: to reduce tax liability and mitigate personal risk. With the right help, entity restructuring should’t be especially painful, and could prove extremely beneficial at tax time or in the event of a lawsuit. You your accountant will likely begin by asking some basic questions:
Is your current business structure right for you?
With the help of a CPA, you’ll need to decide if your present entity structure will suit you and your business moving forward. Together, you can evaluate your current business needs, short-term goals, and long-term outlook to decide if restructuring is appropriate for you.
How might you benefit from restructuring?
If you started your business without much consideration for legal structure, you should definitely revisit the issue. Businesses grow and change over time, as do your ideas about success. There is a good chance that your original structure could be modified to better suit your plans. Under the right circumstances, entity restructuring could provide benefits such as a reduction in personal and tax liability, increased flexibility, and smoother expansion.
On the other hand, staying with an entity structure that no longer fits could result in several problems. These issues include higher taxes, increased business or personal asset risk, and more difficult growth and expansion planning.
How can I be sure I’m on the right path?
Every business owner should enlist professional help for an annual, if not semiannual business planning session. The right counsel can help you uncover potential changes in the way your business is operating, and how to face them appropriately.
Make sure your expert is well-versed in business entity structuring, with an understanding of the current tax and legal benefits of each method. With frequent monitoring, you’ll be able to make sound decisions, save money, and avoid future problems.