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Thread: Best Business Structure for a Micro?

  1. #1
    Join Date
    Dec 2005
    Location
    charleston, sc
    Posts
    93

    Best Business Structure for a Micro?

    Is there a best business structure for a microbrewery? I realize laws vary state to state. I have read over the differences of the business strucues (LLC, Corporation, Sole Proprietor, etc...) but generally speaking is there one that works best (single owner)????

  2. #2
    Join Date
    Dec 2004
    Location
    Mukilteo, WA
    Posts
    304
    Just based on my experiences with opening 2 facilities, I would recommend either the LLC or teh Subchapter 'S" Corporation. S Corps are great for getting money out of the comany and into your hands without being taxed twice, like "C" Corps are.
    If you are a single owner, you can still benefit greatly from the S Corp structure and it will come in handy when you bring on partners, etc. Avoid Sole Proprietorships and C Corps. That was the adviced of our CPA.

    Just my $.02.

  3. #3
    Join Date
    Mar 2003
    Location
    Nashville
    Posts
    676
    We chose an S-corp for the liability protection and for the tax benefits. With an S-designation from the IRS, all of the income passes through to the shareholders without being taxed at the corporate level, meaning you claim your portion of the corporation's income as your personal income and pay taxes on it then. You can have up to 25 shareholders in an S-corp before you have to become a C-corp.

    By all means do not do a sole proprietorship. You will have no legal protections from someone going after your house and assets if something happens to the business.
    Linus Hall
    Yazoo Brewing
    Nashville, TN
    [url]www.yazoobrew.com[/url]

  4. #4
    Join Date
    Aug 2005
    Location
    Phillybrewsitup
    Posts
    9

    s-corp limitations

    legeese,
    Keep in mind that a sub-chapter S corp is limited to 35 investors so make sure that your units are large enough to raise your capital, and everyone investing has to be a [nearly] natural-born us citizen to partivcipate.
    Luck,
    -firey

  5. #5
    Join Date
    Nov 2005
    Posts
    1
    An LLC offers the same tax benefits (you can elect pass-through taxation, like an S-corp, in any state) and has fewer formalities associated with it. It's very easy to get yourself in trouble with an S-corp, because there are a million little rules that, if ignored, can blow your tax or liability insulation benefits.

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