Remembering TCPaul, 2016-2019

Taxation of "an association" of attorneys

Is taxation of an association of attorneys like sole proprie mattbaileylawdotcom05/14/19
Depends on how you structure your financial arrangements wit taxamnesty05/14/19
what scares me is the way you phrased the question. I'm gue dingbat05/14/19
mattbaileylawdotcom (May 14, 2019 - 11:05 am)

Is taxation of an association of attorneys like sole proprietorship? partnership?

I would rather not mess up my mileage, IRA, health insurance, etc. that are fairly easy to do in a sole proprietorship by forming a partnership. But I would like to expand my footprint so to speak by opening a new office and having another attorney staff it.

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taxamnesty (May 14, 2019 - 11:44 am)

Depends on how you structure your financial arrangements with the attorney staffing the new office.

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dingbat (May 14, 2019 - 12:58 pm)

what scares me is the way you phrased the question. I'm guessing business entities is not something you deal with very often, and so I strongly recommend talking to an attorney who specializes therein before moving ahead.

There are six basic options to choose from:

1) sole proprietorship with one or more employees
2) partnership with multiple partners
3) Single-Member PLLC with one or more employees
4) PLLC with multiple members
5) PC with one shareholder and one or more employees
6) PC with multiple shareholders

Each of which has pros and cons, with the main differences being control, risk, and taxation. Not only do you need to evaluate the pros and cons, if you choose Options 2, 4, or 6, you'll need to develop a compensation structure that everyone can agree on, and you'll need to decide how to add partners/members/shareholders while protecting the interest of the other partners/members/shareholders, such as vesting requirements, buy/sell agreements, etc.

In short, you should really talk to a professional

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