Q&A: What type of corporation is best for a music company?
Question by spellboundbeats: What type of corporation is best for a music company?
I am curious as to what type of Corporation i should use when incorporating my Music Production Company. The company is owned and operated by myself. I’ve filled out the paperwork for a D.B.A and have taken the first few steps. Now i need to think of the type of corp needed. Any suggestions?
Best answer:
Answer by GREG S
In the early going, you probably don’t need to incorporate, as it costs money and may not be worh the slight amount of extra tax savings. As you get more volume of sales and, hopefully, profit, at least S corp is good. You can switch to C corp if you need to, but there are limits on how often you can switch back and forth.
If you do incorporate, my preference is C corp. It allows you to store up tax losses in your build-up years or slow years into the future and utilize them in your more profitable years. I have used this off and on through the years very nicely. With sole proprietorships, partnerships, and S corps, profits are passed on to the owners each year. You don’t have control, can’t really plan much.
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