Enterprising professional wants to figure out how to structure his various business ventures that all interrelate.

QUESTION.
I am an associate in a startup professional firm and we are seeking advice on business structure options. At present, the firm has two partners. A third partner will be coming on board shortly, so we are considering a general partnership, LLC, PC, S Corp, or other appropriate entity.

In addition to typical professional engagements, we hope to undertake real estate development initiatives, as well as perhaps the design, manufacture, and retailing of products. Furthermore, we are an international concern doing business in the US and China. We could use further information as to how to structure a business or partnership in China so as to be able to receive fees and transfer funds to the U.S. This may affect which entity we choose.

Any other advice that you can give us regarding liablity, taxation, international business, business structure, etc would be very helpful. In addition, any other suggestions or resources that you could share with regards to setting up operations, financing, state &/or small business incentives or benefits would be much appreciated.

RESPONSE.
Apparently the other SCORE counselor has already done his quota of emails for the day and your questions have been routed to me. Your email indicates that you have a very broad vision of what you want to do for a living. I counted at least 4 businesses in your email:

1. Professional Services Firm
2. Real Estate Development Firm
3. Manufacture & Retail Business
4. Consulting in China

I don't know the rules in your state regarding choice of entity allowed for your profession. I never recommend my clients consider becoming a partnership or an S Corp. And a sole proprietorship is not a particularly good option either. Thus, my hunch is your professional services business should be either a Limited Liability Company (LLC) or a Professional Corporation (PC). The real estate development firm should probably be an LLC. The mfg and retail business should probably be a C corporation. And the consulting in China if it generates much in revenues should probably be the equivalent of a C corporation incorporated in China. That way you can shelter income generated in China from US taxes.

You should also form a C corporation to own all four entities I describe above. Thus, it is my recommendation that you form 5 entities. You will need to consult a business lawyer preferably with an advanced tax law degree, i.e., LLM in taxation. I recommend you read the following link. See Learn a Little about Choice of Legal Entity.

And possibly get a copy of the following book? See STRUCTURING YOUR BUSINESS.

I've given you a few things to think about. And a few things to read. I hope my comments are helpful. Good luck! Regards, -Jeff

Jeff Lippincott
SCORE.org Counselor
Princeton, NJ
scoreprinceton @ aol.com
www.scoreprinceton.org
http://www.jlippin.com/