subject: Tax Planning Services For Business Entities [print this page] Entrepreneurship is much sought after by the generation next with promises of agood revenue and earning capacity.Equipped with inherent qualities of a leader , a drive to achieve through thick and thin and ability to market oneself and the products sound success for the entrepreneurs. With every industry sector open to the entreprenuer to start a business operation, incorporation of this isa starting point of a continuous process.
A Businessentity formationcan either be as a Sole Proprietorships, Partnership, Limited Liability Company or a Corporation.With tax regulations and other compliance regulations that bind each, it is very vital to understand each entity before actually forming it.
Sole Proprietorships:Owned and run by one individual these are inexpensive to form and easy todissolve withno tax aspects as all profits and losses of the business are considered as part of the proprietorspersonal income. The company is disregarded for all tax purposes.
Partnerships: Though inexpensive to form, it involves two or more business entities with liabilities.Taxation is complex, with the firm required to file an informational tax returns to the government.
Limited Liability Companies or LLCs Ahighly flexible business entity with nil to limited liabilitywith the option to betaxed either as corporations, or as partnersor evenbe disregarded for taxationlike a sole proprietorship.
Corporations are much complex business entities with its life independent of the shareholders. It works as a new legal entity and need to conform to taxations rules of the state. However, every entity formation offers adistinct tax and business advantages.
The present day business scenario with footprints across wide geographical boundaries demands that the enterprises are in compliance with the regulations and policies of various locations. Stringent adherence to compliance regulations by the corporate sectors is required to ensure that their workforce is well aware of the tax regulatory policies prevalent in the region and adhere to the same. Evading taxes might put the employees and the employer in difficult situations as it is punishable under the law.
Effectivetax planningis very vital for the organizations as well as for all the employees. Tax planners and professional consultants help organizations with the effective ways for planning out the corporate taxes and financial matters.The large corporate sectors are benefitted by their in-house tax planning services and financial consultants, who work out tax planningstrategies whereasthe small and medium enterprises follow taxregulations.
Further with a number of entity formationsof multinationalstature setting base in India and similarly Indian companies leaving imprints on the global map, theseorganizations need to also adhere to the regulations ofForeign Bank Accountreporting and its added taxation issues. Such provisions made for corporate compliance will ensure reduced to nil tax evasion, embezzlement, accountmaintenancein different banks, mail fraudsand willalso put a stop to conspiracy.
