Written By Mark Mirsky

With any new business (whether you’re just starting or have been at it for a while), you need to consider what type of entity your company should be. But how do you choose the right entity for your business? There are several questions to consider, and you need to think about the long-term direction of your company—not just what makes the most sense today. Some of those key questions include:

• How will your business be funded?
• How many employees will you have?
• How many owners are there (and would you ever bring on co-owners in the future if you’re on your own right now)?
• What will your exit plan be when you retire or leave your business?
• Where will you do business?

There are several other questions that need to be answered to help you determine the best entity. But ultimately, you have to run the numbers long-term and consider the what-ifs.

Every entity type will bring with it benefits and drawbacks that vary from business to business. When it comes down to making your decision, it’s best to sit down with a professional who can help you understand the differences between each entity type, and which one offers the best long-term benefit for your business. Any business owner you ask will have their own opinion on what’s best, but it really comes down to your own company and the numbers that make the most sense for the growth and success of your business.

Circular 230 Disclosure: Any tax information or written tax advice herein is not intended to be and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer.

Mark W. Mirsky is the managing director of ROI Business Services, LLC, in Bartlett, Illinois. A licensed CPA in Illinois, he leads the taxation and management advisory services, focusing on partnership, S corporation, and multistate taxation, as well as assisting business startups, the acquisition and disposition of businesses, international taxation, and real estate. He’s a member of the AICPA, ILCPAS, member of the Business Success Network of LeTip International, Board Member of the Bartlett Chamber of Commerce, the Bartlett Travel Soccer Club, and the Provena Mercy Medical Center Foundation. Most recently, Mark has been recognized as a Chartered Global Management Accountant (CGMA).