A BUSINESS OWNER’S READING PATH
Bring Clarity to Your Business Entities
A practical reading path for documenting ownership, money movement, and responsibilities across businesses.
Start with a map of your current businesses before adding another entity. The goal is to make the structure understandable to your owners, attorney, tax advisor, and bookkeeper.
1. Map what exists today
List each legal entity, its owners, its activities, its bank accounts, and its tax filings. Add contracts, assets, and loans to the map so your team can see where responsibilities sit.
Read: Entity cleanup guide2. Define the reason for separation
A new business, a new partner, or a different asset may prompt a structural discussion. Ask your attorney about legal implications and your tax advisor about classification and reporting before making transfers.
Read: One LLC or separate LLCs?3. Make the records match the structure
Document payments and agreements between entities. Identify who maintains records and who reviews them. Ask your advisors to distinguish loans, contributions, reimbursements, and service payments in your circumstances.
Read: Intercompany charges and agreementsQuestions worth asking
- What purpose does each entity serve?
- Do our documents, accounts, and actual operations tell the same story?
- What would change if we added a partner, sold an asset, or closed a business?
- Which annual filings and administrative costs should we track?
Primary reference: IRS LLC classification guidance. Legal separation and asset transfers require advice specific to your state and facts.