It is imperative for gay and lesbian business owners to examine business structure not only in the context of the business itself, but also in the context of their entire financial and personal situation.

The default set up for a self-employed gay or lesbian person is as a sole-proprietor. This set-up may have advantages such as simplicity, but has many limitations. This set up is likely not the best one, and even if it was the correct choice, years ago, circumstances may have changed. Business owners need to overcome the inertia effect and look at all of the business structures available.

There are more options today then there were even a few years ago. In addition to the Partnership and the Corporation within the corporate entity alternatives exist. Common corporate entity types are the regular C Corporation and the S Corporation. In recent years the LLC has become more popular and there are various kinds of LLCs.

All Corporations and LLCs are not created equal. The entity choice must depend on the specific needs of, and circumstances of the business owners. The choice of entity often affects the potential to shift income between the domestic partners, which as we have outlined may have ramifications in terms of the overall tax burden. Decisions regarding ownership of the entity are also of great significance for estate planning purposes. We examine the needs of each client in the context of his or her particular circumstances. Informed decisions can then be made together with our clients.