Legal Question in Business Law in Pennsylvania

I don't understand single owner electing to be disregarded as a separate entity.

So if i choose not to be taxable as a corp., then i choose single owner electing to be disregarded as a separate entity.

So I understand that it is easier for me as a single owner electing to be disregarded as a separate entity for tax reasons, but what about financialy? (i.e. Business Loans and Grants, Business Credit Cards, etc.)


Asked on 6/25/12, 12:56 pm

2 Answers from Attorneys
Scott Polsky

You are confusing different types of entities (corporation, limited liability company, sole proprietorship) for state entity classification purposes as well as the different types of tax classifications (corporation, S corporation, partnership, disregarded entity) for federal (and maybe state) tax purposes. You really should speak with an attorney to explain the pros and cons of both types of choices. Feel free to contact me. 215-367-5110

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Answered on 6/25/12, 1:05 pm
Michael Duffy Duffy Law, LLC

Hi there,

The owner is not disregarded as a separate entity, the business is. The business profits and losses pass through to the owner and are reported on Schedule C of their federal tax returns. Similar procedures may take place for state taxes. You must be very careful to keep your business and personal finances and activities separate for a variety of reasons, such as tax and liability benefits.

If you would like to discuss your matter further over a free and confidential phone consult, please contact me at your convenience.

Regards,

Michael J. Duffy

Duffy Law, LLC

1-888-414-5773

www.mduffylaw.com

[email protected]

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Answered on 6/25/12, 1:54 pm


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