united-states, taxes, llc, incorporation, s-corporationI am planning to form a holding company (Company A) to serve as an umbrella for two distinct business – a services company (Company B) and a company that sells products (Company C). I have chosen this structure because I want the flexibility to leverage or sell Company B and Company C independently of each other in the future.
For tax purposes, what are the best choices of entity types for these three organizations?
My current thinking is that Company B and Company C should both be formed as LLCs so that a loss by one organization is able to counterbalance income from the other. Would doing that prevent me from forming Company A as an S Corporation?
Thanks in advance.
Why do you need 2 entities? Why not 2 divisions of 1 entity? Simpler and cheaper. You just need good bookkeeping and the books setup by a quality accountant with experience doing it. An LLC is a good entity structure to use; however, the best choice of entity depends on the desires and goals of the owners.
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