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CPA Firm as LLP or LLC or Partnership

Plano, TX |

I am in the process of opening a CPA firm. I was wondering the best form to use. Partnership or LLP or LLC? Which is the best for a CPA firm if I have to go it alone? Guess I can't do the LLP if I want to do it alone. Can I use my wife as a partner?

Attorney Answers 4

  1. If you're in Texas, you will likely need to incorporate as either a PLLC or professional association, based on the Texas Business and Organizations Code requirements. There are a few additional requirements to organizing these types of entities, so I suggest contacting a TX business attorney here on Avvo experienced in forming these entities. There are restrictions on who can own equity in professional organizations, and if your wife does not have a license, her ownership (apart from community property interests) could potentially be problematic. You can always organize a PLLC as a single member entity (disregarded entity for taxes), or in the alternative use a PA if you want to go the corporate taxation route (which could be advantageous from a self employment tax perspective if you make an S election). Regardless, contact an attorney to help advise you on these matters, as there is some additional complication with professional organizations.

    This advice is for INFORMATIONAL PURPOSES only and should not be relied upon as legal advice. No attorney-client relationship shall be formed as a result of the answer above.

  2. You may also want to add S corporation, C corporation and PLLC to the list so all types of actual entities are considered. To make an informed decision, it is helpful to project your income and expenses as well as what type of retirement plan you wish to implement. One size does not fit all. Suggest you contact a couple of solo CPAs to see how each of them arrived at his or her decision.

  3. A business planning attorney would be a very good idea to have on your side as you wrestle with choice of entity considerations and other aspects of launching your firm. Best of luck with the new firm

    Statements posted on the Avvo Q&A section are not legal advice. No prudent person anywhere at any time should ever rely upon any statements posted on the Avvo Q&A section. There is no attorney-client privilege based on this interaction. I am not your attorney and there is no attorney-client privilege up until the moment that we have a signed engagement letter with a clear understanding regarding fees - at which point we will not be discussing your legal issue online on a public Q&A board that anyone in the world can view. You should find an attorney that can best represent your interests: using the Avvo lawyer search is one of many possible utilities online to collect names of lawyers you might be interested in meeting with offline to discuss your legal issue in full detail so the legal advice can be tailored to the specific facts of your legal issue.

  4. Most professionals incorporate as a LLC or a S Corp (or PLLC or PS). Your particular state may have a different name. You might have small self employment tax savings with a PS. But sometimes the tax savings are not worth the additional hassle with a S corp. Contact a tax attorney in your state.

    LEGAL DISCLAIMER: I am licensed to practice law only in Washington, Alaska, and Idaho. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses are only general legal education and are only general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information on this site is not a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state.

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