Corporate Formation and Taxes

Tax issues should guide your choice of a corporate structure. At the early stages of an online company, any corporate structure, other than a sole proprietorship, provides sufficient protection for your personal assets. However, the choice of corporate structure can have significant tax consequences that are not easily undone.

Figuring out corporate formation issues is not the only reason find a good tax adviser, simple tax and accounting issues should be reason enough. As you begin your business, having a thorough understanding of the tax implications of capital leases, different types of revenue recognition, and owner compensation are critical to avoiding costly or time consuming corrections as your business grows.

A savvy tax adviser can also help you avoid one of the largest problems companies make: no metrics. A good tax adviser can help you come up with easy strategies to track metrics like this. They can also help you avoid revenue recognition and other accounting problems that make it difficult for you, or another adviser, to answer the perennial question “what is my company worth?”