Best Certified Public Accountants in Lima, OH

When starting a business, choosing the right entity structure is crucial. Options include sole proprietorship, LLC, partnership, and corporation. A sole proprietorship is simple and requires no formal paperwork. In Ohio, you can reserve your business name with the Secretary of State's office. Income and expenses are reported on the owner's personal tax return. An LLC offers legal protection. It creates a separate entity with limited liability. Owners' personal assets are safeguarded if the LLC can't pay debts. However, owners may still be liable for certain debts, taxes, or personal wrongdoing. A single-owner LLC is treated like a sole proprietorship for tax purposes. Multiple owners create a partnership, requiring a separate tax return. Net profits are passed down to owners for personal tax filings. Non-LLC partnerships lack limited liability protection and add tax complexity. Corporations include LL Cs that elect to be taxed as such. S-corporations pass net profits to owners for personal income taxes, providing limited liability. It allows tax savings when owners pay themselves salaries. C-corporations are taxed at the corporate level and may face double taxation when distributing earnings to shareholders. They're used by large companies and startups planning to raise capital. Choosing the right entity structure is complex with significant tax implications. Seek professional assistance, like Davis Accounting & Tax, for a tailored tax plan that fits your needs.