The Corporate Transparency Act (the “CTA”) has been in place since 2020 when it was passed as part of the National Defense Authorization Act for Fiscal Year 2021; however, after a long administrative rulemaking process, the Beneficial Ownership Information (“BOI”) reporting requirements have only recently been finalized and will first become effective on January 1
Once coupled to a development idea, every entrepreneur faces the challenge of deciding which business entity would best suit his or her needs. While one would think that there is one right answer to this dilemma, in fact, the answer depends on a number of factors that are unique to each business, resulting in many different entities being the "right" choice, depending on the circumstances.
Factors affecting entity choice include:
- Liability Protection
- Owner Relations
- Income Tax Consequnces
- Other Tax Consequences
- What Others are Doing
Considering these factors, the owner has the following choices:
- Corporation (S-corp or C-corp)
- Sole Proprietorship
- Limited Liability Company (LLC)
- Limited Partnership (LP)
- Limited Liability Partnership (LLP)
- Others, such as Joint Venture, etc.
Perhaps the best way to compare all these choices is through a table which sets forth some of the most common advantages and disadvantages of each type of entity in comparison to the above factors:…