In this brief column we answer a burning question on our clients’ minds concerning farm tax issues.
Question: It seems like our business structures have gotten out of hand with too many entities. What should we do?
Answer: Many times there are serious gaps in the way the entities are transacting business with each other. So, it’s not necessary to throw away the entire business structure, but rather change the timing, nature or documentation of the transactions.
We often run into complicated business models. I like to say they’ve gotten there by design or by default. In either case, the answer to your question is to consult with a qualified business strategist who can help you determine where to consolidate, what to start doing and what should go away.
As a firm, K·Coe Isom can bring a team of specialists in to make a comprehensive appraisal of the purpose of all those different business entities. That’s where the process should start. By questioning the purpose of each entity. If it doesn’t have a clear purpose, it probably doesn’t have a place in the overall structure of your business.
For more information on “cleaning up” your business structures, contact Doug Claussen at doug.claussen@kcoe.com.