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Taking the Plunge!

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Your questions should be directed to two professionals:  a competent CPA and
an attorney specializing in business organization *and* dissolution.  It may
be best to remain a partnership, depending on where you are located.
(Homestead exemption laws are much more liberal in Florida and Texas than
they are in Arizona or California --- O. J. Simpson taking up residence in
Florida attests to that.)

While at this time, your main concern is creating a business organization,
probably more disputes are created when dissolving a business than are
created in the conduct of the business.  Provisions for buying out one of the
partners or stockholders or survivors of a partner or stockholder should be
thoroughly discussed with the two professionals recommended above.  If they
don't bring up the subject, *you* should!

Discuss with the CPA how the profits of a Sub-S corporation that pass to the
stockholders are taxed: as ordinary income, dividends, etc.???  Would a
professional corporation be better than a Sub-S corporation?  What about a
regular corporation?  Maybe a LLC/LLP (Limited liability company/limited
liability partnership) would be better.

If you are going to incorporate, which state has the best incorporation
laws?  How would the corportation be treated as a foreign corporation in your

Similar to advice I give to homebuyers:  Don't get too excited about
buying/creating the house/business --- you have to live with the results for
a long, long time.

Good luck.

Roger Turk
Tucson, Arizona

John O. Grieshaber wrote:

. > My partners and I are in the process of forming our own firm.  Taking into
. > consideration that every state's tax and business laws are different, does
. > anyone have any recommendations on which form of ownership provides the
. > most protection from personal assets?  For engineering firms in our
. > state, I understand the most common forms of ownership are an S
. > Corporation, a Limited Liability Corporation, and a Professional
. > Corporation.

. > Any insights would be extremely helpful.

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