Choosing the Entity of Your Practice

Camala Bailey, CPA, CVA, at Camala C. Bailey, CPA, PC, explains what you should do when choosing the entity of your practice.

Interview Transcript (slightly modified for readability)

“One of the most crucial decisions that a person can make when starting their practice or buying a practice is the entity choice. What I mean by that is, should they set it up as an LLC? Should they set it up as a corporation? Should they be a sole proprietor?

One of the things that I tell people is, an LLC is a great place to start and then elect to become an S corporation. The other thing that I tell people is, do not choose to be a C corporation. A C corporation, as you start out, you don’t think about these things, but at the end, when you go to sell your company, there can be double taxation, which can be very, very costly, especially when you’re in a retirement age. Entity choice can be very, very crucial and you can actually save hundreds of thousands of dollars if you do it right.”