Foundational Tax and Legal Strategy
Expert Entity Formation, Structuring & Conversion
Comprehensive advisory on selecting, forming, and strategically converting your legal structure (LLC, S-Corp, C-Corp) to optimize tax flow, minimize liability, and prepare for future investment.
Strategic Formation and Compliant Conversion from Day 1
Initial Entity Selection & Tax Classification: We analyze tax and liability risks, modeling costs like self-employment tax vs. payroll tax, to select the optimal structure—LLC, S-Corp, or C-Corp—balancing liability protection and tax efficiency from the start.
Strategic Entity Conversion: We handle all required IRS and state elections—such as Form 2553 for S-Corp—and legally convert entities (e.g., LLC to S- or C-Corp) to unlock tax savings or prepare for investment, ensuring the transition remains tax-free.
Ongoing Structural Optimization: We advise on parent-subsidiary and complex partnership structures, ensuring compliant, efficient intercompany transactions and proactive multi-entity management for asset protection and tax optimization.
Foundational Compliance & Documentation: We handle state and federal registrations, and ensure all initial filings are compliant, establishing a legally sound and fully defensible structure.
FAQs
Q: What is the primary tax benefit of converting my LLC to an S-Corporation?
A: The main benefit is the potential to save on Self-Employment Tax (SE Tax). An S-Corp allows the owner to take a reasonable salary subject to SE Tax, while the remaining profits can be taken as a distribution, which is not subject to SE Tax (Social Security/Medicare).
Q: If I form an LLC, am I automatically protected from liability?
A: No. Forming an LLC only provides protection if you adhere to strict legal boundaries, known as maintaining the corporate veil. We advise on the proper procedures (like using separate bank accounts and meticulous documentation) to ensure your liability protection holds up.
Q: We are starting a business with a foreign partner. Does that change our structural options?
A: Yes, significantly. A foreign partner generally cannot be a shareholder in an S-Corporation, limiting your options to a C-Corporation or a Partnership/LLC. We usually recommend C-Corporation to avoid the trap of 37% foreign partner tax withholding.
Testimonial
“Starting my business felt overwhelming until this firm stepped in. They analyzed my goals and recommended the exact right structure, handling all the confusing state and federal filings. I now operate with the confidence that my personal assets are protected, and my structure is tax-optimized." — Kevin Fan, the Founder of CBT Support Technology LLC, a regional E-Commerce firm.