{"id":17941,"date":"2026-06-15T10:17:01","date_gmt":"2026-06-15T10:17:01","guid":{"rendered":"https:\/\/www.heyerinc.com\/blog\/?p=17941"},"modified":"2026-06-15T10:17:02","modified_gmt":"2026-06-15T10:17:02","slug":"is-it-time-to-change-your-entity-structure","status":"publish","type":"post","link":"https:\/\/www.heyerinc.com\/blog\/2026\/06\/15\/is-it-time-to-change-your-entity-structure\/","title":{"rendered":"Is It Time to Change Your Entity Structure?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">When the majority of businesses start out, it\u2019s rare for them to select an entity structure that still makes sense for them several years down the line, and that\u2019s okay; circumstances and finances change, after all. But what isn\u2019t okay, is when business owners don\u2019t realize that they should be changing their structure, or postpone it for some reason, leaving them open to any number of tax inefficiencies.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Reviewing your chosen existing entity structure with <a href=\"https:\/\/www.heyerinc.com\/\">Coral Springs accountants<\/a> is the best way to determine whether it\u2019s still the most tax efficient option, but you should also be aware of the following information:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Why the structure of your business is so important<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Three critical things are determined by your company\u2019s legal entity:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Exposure to personal liability<\/strong><\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Could you be jeopardizing your personal savings?<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Tax treatment<\/strong><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Are you paying too much in self-employment and income tax?<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Potential for growth<\/strong><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Can you raise enough capital or bring partners onboard?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Knowing when you should change your entity structure<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you see any of the following signs, it could be time to make a change:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Significant net profit growth \u2013 <\/strong>if you\u2019re a single-member LLC or sole proprietor, you\u2019ll pay 15.3% self-employment tax on all net profits. But when you start to earn $60,000 or more in annual net profit, consistently, you could save thousands of dollars by electing S-Corporation tax status instead.<\/li>\n\n\n\n<li><strong>There is a substantial liability risk \u2013 <\/strong>clients who sue the business of a sole proprietor can chase after their home, bank accounts, and retirement savings. Forming a corporation or LLC could protect you from this should you start hiring more employees or signing bigger contracts. \u00a0<\/li>\n\n\n\n<li><strong>Investors are interested in funding your growth \u2013 <\/strong>C-Corporations tend to be preferred by angel investors and venture capitalists, and if you\u2019re in need of institutional capital, it could well be advantageous to convert into a C-Corp from an LLC.<\/li>\n\n\n\n<li><strong>You want to attract top talent \u2013 <\/strong>C-Corps give more opportunities for attractive stock options and equity compensation plans that could help you find and retain the right employees.<\/li>\n\n\n\n<li><strong>Your tax circumstances have become more complex \u2013 <\/strong>if your existing tax situation is growing increasingly complicated, it might be time to consider a more appropriate structure.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What to avoid when changing entity structure<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From waiting too long to convert to a different entity, to trying to do it without guidance from local tax experts, although converting structures may be a smart move for your business, it\u2019s important to take great care when doing so.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Other things to avoid are failing to update everything, including bank accounts, EIN, vendor agreements, insurance policies, contracts and licenses. Don\u2019t do this and you could find yourself facing legal complications, or gaps in liability coverage. You should also ensure that if electing for S-Corp treatment, you pay yourself a salary deemed reasonable before taking distributions. Lastly, by not converting at the start of a tax year, you\u2019ll inevitably create short tax years, and add complexity that you and <a href=\"https:\/\/www.heyerinc.com\/tax-planning-services\">tax planning in Coral Springs<\/a>, could well do without. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Whether your revenue has grown considerably, or there have been major changes to your risk profile, a structure that once served you well, could soon start to hold you and your business back. If you would like to know if your existing entity structure is still performing well for you, or if it could be time for a change, schedule a consultation with a local tax advisor at the earliest.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>When the majority of businesses start out, it\u2019s rare for them to select an entity structure that still makes sense for them several years down the line, and that\u2019s okay; circumstances and finances change, after all. But what isn\u2019t okay, is when business owners don\u2019t realize that they should be changing their structure, or postpone it for some reason, leaving them open to any number of tax inefficiencies. Reviewing your&#8230; <a class=\"more-link\" href=\"https:\/\/www.heyerinc.com\/blog\/2026\/06\/15\/is-it-time-to-change-your-entity-structure\/\">Read More<a><\/p>\n","protected":false},"author":1,"featured_media":17942,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-17941","post","type-post","status-publish","format-standard","has-post-thumbnail","category-uncategorized","entry"],"_links":{"self":[{"href":"https:\/\/www.heyerinc.com\/blog\/wp-json\/wp\/v2\/posts\/17941","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.heyerinc.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.heyerinc.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.heyerinc.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.heyerinc.com\/blog\/wp-json\/wp\/v2\/comments?post=17941"}],"version-history":[{"count":1,"href":"https:\/\/www.heyerinc.com\/blog\/wp-json\/wp\/v2\/posts\/17941\/revisions"}],"predecessor-version":[{"id":17943,"href":"https:\/\/www.heyerinc.com\/blog\/wp-json\/wp\/v2\/posts\/17941\/revisions\/17943"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.heyerinc.com\/blog\/wp-json\/wp\/v2\/media\/17942"}],"wp:attachment":[{"href":"https:\/\/www.heyerinc.com\/blog\/wp-json\/wp\/v2\/media?parent=17941"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.heyerinc.com\/blog\/wp-json\/wp\/v2\/categories?post=17941"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.heyerinc.com\/blog\/wp-json\/wp\/v2\/tags?post=17941"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}