Using a Corporation

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Analysis of Using a Corporation

The needs of a business are as unique as those of individuals. Careful consideration should be exercised in weighing the separate needs and the choice based on those weighted criteria.

Advantages

Disadvantages

  • Control of liabilities associated with operating a business.
  • Allowance of employee benefits in some circumstances.
  • Allowance of health insurance in some circumstances.
  • Allowance of improved deductibility of retirement plan contributions.
  • Separation of business and personal taxes.
  • Simple transfer of ownership.
  • Simple transfer of wealth in estate situations.
  • Durable business structure that continues past the death of the owners.
  • Cost of forming a corporation.
  • Requirement of administering a corporation.
  • Cost of filing federal and state corporate tax returns.
  • Possible double taxation.
  • Necessity of operating at arms length between the corporation and shareholders.