1. Choosing an Entity: Liability and Tax
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2. Considerations to Choose Form
Liability
Tax
Owner’s obligation to pay debts of company
How the business income is taxed

3. Liability
Full—personal responsibility
Joint and Individual—each owner personally responsible
Company X owes person C $100, but there is no money in Company X. Owners A and B are 100% liable to pay person C back. How will C get paid?
Owner A or B can pay $100 and seek reimbursement from the other owner.
Owners A and B can split the payment.
Limited—responsible to the extent invested

4. Tax Pass through Double taxation
Income taxed through personal tax return
Double taxation
First, income taxed at the entity level
Second, leftover dollars distributed to owners are taxed through personal tax return