Entity Formation

Forming the right business entity is critical to your business’ success.

Determining your legal entity and determining its organizational structural deserves early and careful planning. The most appropriate choice of entity depends upon your preferences for personal and entity taxation, risk of liability, business management authority, obligations as to meetings, paperwork, filings, personnel, and officers and directors. We will work you and, when appropriate, other professionals, such as CPAs or estate planning professionals, in order to advise you on the concerns and consequences of each entity choice.

Tax Implications

Preferences for certain tax and management structures help clients weigh the pros and cons of one business entity against the other business entities, whether that is a C Corporation or S Corporation, Limited Liability Company or a Professional, Limited Partnership, or General Partnership. IMG can help you determine what type of business entity is the best option for you.

Legal Entities We Frequently Create

The key benefit of corporate status is the avoidance of personal liability. The primary disadvantage is the cost of entity formation, as well as, the extensive record-keeping that is required. While double taxation is sometimes mentioned as a drawback to incorporation, the S corporation (or Subchapter corporation, a popular variation of the regular C corporation) avoids this limitation by allowing income or losses to be passed through on individual tax returns, similar to a partnership. If you are thinking about forming a corporation, please contact IMG.

Limited liability companies, often referred to as “LLCs,” have been around since 1977, but their popularity among small-business owners is a relatively recent phenomenon. LLCs have garnered popularity because they allow owners to reap the benefits of both the corporation and partnership forms of business. Profits and losses can be passed through to owners without taxation of the business itself, and owners are shielded from personal liability. Please contact IMG if you would like to learn more about the formation of an LLC.

A partnership involves two or more people who agree to share in the profits and losses of a business. The partnership does not bear the tax burden of profits or the benefit of losses; profits or losses are “passed through” to partners to report on their individual income tax returns. However, each partner is personally liable for the financial obligations of the business. Have more questions about partnership agreements? We can help.

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IMG Compass

Let us apply our world-class capabilities. We’ll start by getting to know you. You do the talking, we’ll do the listening. Our tailored solutions will help you meet the challenges and opportunities of doing business in the U. S. market, and beyond.

800 Fifth Avenue, Suite 4100 
Seattle, WA 98104

Office: (206) 707-8338
Fax: (206) 707-8338

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