I was talking to one of my business colleagues last week who happens to own a CPA firm. We were talking about corporations and I brought up a situation I ran into a few days earlier with a client. I asked him how he would have structured the entity. His response was no surprise to me.
“I would structure it so that your client would pay as little as possible in taxes.” - CPA
Although not a surprise, I was intrigued. I wonder how an attorney would answer that question.
“I would structure it so that your client would be protected from lawsuits.” - Attorney
If you have ever attended an asset protection seminar, you probably have heard something like this.
“You need to set up one entity that owns another that owns another that is registered in Nevada and foreign filed in your state and has an agent in California who has another corporation that pays an LLC that your wife owns which distributes earnings to a 5th corporation which has your neighbors name on it and then he cuts a check once a week to your 6th and final entity and…” Well, you get the point right?
I heard a Business Credit consultant answer this same question.
“I would structure the corporation so that you can build credit on it.” – Credit Coach
Isn’t that interesting that different professionals could have such unrelated entity strategies? The basic frame work for each entity is going to be similar and yet different enough that forming it one way could affect your ultimate goal. Is your goal asset protection, tax savings, credit or a combination of all of these? Only you can answer that question.
What is your corporation doing for you?
“I would structure it so that your client would pay as little as possible in taxes.” - CPA
Although not a surprise, I was intrigued. I wonder how an attorney would answer that question.
“I would structure it so that your client would be protected from lawsuits.” - Attorney
If you have ever attended an asset protection seminar, you probably have heard something like this.
“You need to set up one entity that owns another that owns another that is registered in Nevada and foreign filed in your state and has an agent in California who has another corporation that pays an LLC that your wife owns which distributes earnings to a 5th corporation which has your neighbors name on it and then he cuts a check once a week to your 6th and final entity and…” Well, you get the point right?
I heard a Business Credit consultant answer this same question.
“I would structure the corporation so that you can build credit on it.” – Credit Coach
Isn’t that interesting that different professionals could have such unrelated entity strategies? The basic frame work for each entity is going to be similar and yet different enough that forming it one way could affect your ultimate goal. Is your goal asset protection, tax savings, credit or a combination of all of these? Only you can answer that question.
What is your corporation doing for you?
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