Can Accounting Firms Be an LLC?

Why Form an LLC for an Accounting Firm

• An LLC will give you personal liability protection against potential business risks as well as give your accounting firm more tax options and credibility.
• It is relatively inexpensive and simple to form and maintain an LLC.

Benefits of Operating as an LLC for an Accounting Firm

• Starting an LLC can provide several benefits, primarily offering limited liability to owners to protect personal assets from lawsuits and creditors.
• LLCs are taxed as pass-through entities, meaning the net revenue of the firm is passed through to the owner’s personal tax return.

Choosing the Best Legal Structure for an Accounting Firm

• An LLC structure offers limited liability to owners, providing personal asset protection.
• LLCs are taxed as pass-through entities, offering potential tax advantages.
• Partnership, corporation, and sole proprietorship options also have their own considerations.

Setting Up a Business Entity for an Accounting Firm

• Making your accounting firm an LLC or corporation should typically be among the first steps before opening.
• Consulting an attorney can help determine the best fit for your firm’s goals, location, and future growth vision.
• Some states prohibit accountants from forming LLCs.

Launching and Running an Accounting Firm

• Ongoing expenses include office space, equipment, software, advertising, insurance, and professional development costs.
• Revenue comes from client fees for various services provided by the accounting firm.
• A strong foundation in accounting and passion for the field are essential for success in running an accounting firm.