Confusion over business structure

[mercuryboy]

Hello,
I am in the process of writing a business plan for an "entertainment agency" which I am making a much more confusing stucture than maybe it needs to be.
My idea is below and the question I have is;
Is this too involved, could I go about this in a different and possibly less complicated manner? Is there a better way to accomplish what I want?

The business concept is this:
I am a musical person. I compose, perform and record music and am trying to bundle all of those aspects into potentially 2 business. One, a recording service, owned by another, which I am calling a music group.
I want the music group to be an umbrella for all of my personal musical endeavours. Acting in a way as a parent company for the individual groups I perform with, which will be or are legal entities themselves. I would like the music group to handle the administrative aspects of these entities, membership fees, artist management, promotion, publishing. . . . . . .

The recording service will be a mobile one (its operations are not associated or limited to a specific building i.e studio) in which I will be the main employee with assistants as needed.

simple right?

Here's where I get confused

I will be the owner of all of these businesses (music group, musical acts, and recording service) as well as a client. The circle of money (music group->artist->recording service->music group) is my main point of confusion. Obviously with the recording service there will be other clients and I'm not paying the bands to play. I'm most concerned with taxes and personally being taxed unnecesssarily or multiple times on the same money.

At the moment I am considering an S-corporation for the music group and LLC's for the rest.


I hope this is understandable. I fear I may be so confused I don't know the source of my confusion.


Cheers and Thanks,
Graham

[testfilipa]

I fail to see why you need a different entity for each business type. Three business entities will require three times the expense and paperwork that creating one business entity will. You may end up with a tax benefit or two, but I doubt that the couple buck you save as a result will offset the initial set-up expenses and time/paperwork involved for every transaction and tax filing.

I would go with one c-corp initially encompassing all aspect and, if you (or your accountant) later determines separate shells are necessary, spend the time and effort to create a new entity. But I'd wait until that time arises before you spend any money.

Just my 0.02.

I would recommend you find a local CPA who specializes in handling small businesses and get his or her input.

Also, wcnones gives some good advice IMHO about the downsides of having too many entities. Unless you're fairly sophisticated, you'll find multiple entities a real burden.

One tiny example: If your entity is a corp and has more othan $250,000 in assets or revenues, you'll need to include balance sheets in your tax return... and that'll mean you'll need to buy and learn how to use something like QuickBooks.

[Zekdpdtm]

I absolutely agree with both of the replies above. Keep things simple as you can, both for your sanity and your wallet.

[RebeldeShi]

First of all, we haven't heard you reasons for making different entities in the business at all. I anbolutely agree taking on an accountant and legal advisor.

[Oceannaadveri]

i need more information about this subject.

[Jonstanaut]

I'm with the tax experts on this one, keeping it simple is the way to go.

I can tell, from your post, that there is a reason you would like to separate the entities (whether it has to do with who owns shares in what part of the business or to avoid a conflict of interest etc). Whatever the reason is, just make sure it's worth the extra hassle.

Accounting services and legal services can add up pretty quickly but, in this case you’re not filing a tax return and you’re not in litigation. If you just have a few simple questions, the bill won't amount to much at all.

Make sure you come prepared with a clear idea of the end results you would like to see and the meeting with a CPA or lawyer and your will be money well spent (just don't get hung up on how you would like to go about doing things as there can often be more than on great ways to run your business).

[shewsQueed]

Remember I am Canadian.

I really think you are complicating your life. KISS (Keep It Simple Stupid).

Start one business that offers all of these services. These services can be marketed completely separately where the user will never know the difference. Give each one its own logo etc.

Good luck!