Case Study : The Real Estate Boom Essay

723 Words Jul 6th, 2015 3 Pages
The recent real estate boom has many construction-based businesses reconsidering the structure of their business. Recent changes to California state law have increased the number of factors contractors should consider when deciding which business organization structure is best for their purposes. If you have been operating as a sole proprietorship/general partnership, recent changes to the law in combination with the real estate boom probably have you wondering what the advantages might be of setting your business up as an LLC or S Corporation (S Corp).

You might, as many business owners are, be under the assumption that restructuring your business would be too expensive or too time consuming, but neither drawback should prevent you from benefitting from reorganization.

The LLC: Now an Option for California’s General Contractors
The LLC is now an option for contractors looking for protection for their personal assets. Previously, only individuals or corporations could be licensed. This led many contractors and other professionals looking for liability protection towards incorporation. California now allows LLCs to be licensed; although licensing your LLC will mean higher fees in comparison to individuals or corporations. Depending upon the needs of your company, the LLC could hold all the advantages you need. For others, the S Corp might be the best option.

The LLC provides the advantage of tax flexibility and less paperwork. Like corporations, the LLC offers members…

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