The most common business structures are sole proprietorships, general partnerships, limited liability companies (LLCs), and corporations. A CPA firm can help you differentiate between these types and offer continued assistance with your business, such as cash flow management, tax preparation, and other beneficial services.
Sole Proprietorship
The most common business structure is the sole proprietorship. Because it is an unincorporated form, although a sole proprietor can later choose to incorporate the business, it is the simplest to create. Another substantial advantage of a sole proprietorship is that it allows an individual to maintain control. The IRS requires sole proprietors to report all expenses and profits on their annual income tax returns. Additional forms may be necessary, as well, depending on the specific circumstances.
Partnership
The Internal Revenue Service (IRS) defines a partnership as “an unincorporated organization with two or more members [who] carry on a trade, business, financial operation, or venture and divide its profits.” There are several partnerships: general partnership, limited partnership (LP), and limited liability partnership (LLP). These entities must file IRS Form 1065 annually, and each partner must report their “share of the partnership’s income or loss on their tax return” (IRS). Additional forms may also be applicable.
Corporation
Corporations must file a Certificate of Formation with the Texas Secretary of State. These forms vary depending on whether the corporation is for-profit or nonprofit. There is also a form for professional corporations. According to the IRS, corporations may be responsible for income, estimated, employment, and excise taxes. A CPA firm can help C-Corps and S-Corps prepare and file the appropriate forms based on your company’s specific situation.
Consult an Experienced CPA Firm
Hollis Lewis & Company, PLLC was founded in 1947 by Fox H. Hollis Jr. to provide accounting services and tax preparation to Southeast Harris County. Thirty years later, in 1977, Mark E. Hollis joined the firm to include the Houston area. Then in 2002, Gordon A. Lewis merged his The Woodlands accounting practice into the Hollis firm to create Hollis Lewis & Company, PLLC.
With more than 90 years of combined experience, our CPA firm can also assist with planning your business, including offering advice on which structure may be ideal for your business. Ultimately, however, the decision is yours to make. Additional business services include formation, accounting, payroll, cash flow management, succession planning, and tax preparation.
Today our firm serves individuals, businesses, and nonprofit organizations at one of our two conveniently located Texas offices: Clear Lake and The Woodlands. The industries we serve include but are not limited to construction, healthcare, hospitality, legal, manufacturing, and retail. We invite you to contact us today to discuss your accounting, planning, or tax preparation needs.
Resources:
“Business Structures.” Internal Revenue Service (IRS).
“Choose a Business Structure. U.S. Small Business Administration (SBA).
“Selecting a Business Structure.” Texas Secretary of State.
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