--- title: "Accounting for Lawyers: Which Entity Is Best for Your New Law Practice?" description: Choosing a form of entity for your law practice affects the way you pay taxes, report revenue, and manage its financial functions. image: https://www.ironscpa.com/hs-fs/hub/332864/file-2063275311.jpg --- ![icon-phone](https://www.ironscpa.com/hs-fs/file-469552994-png/images/icon-phone.png)508-533-5700 **Call today to book your appointment!** [![Ann M. Irons](https://www.ironscpa.com/hs-fs/file-480654324-png/images/circle-logo4.png?width=630&height=168&name=circle-logo4.png "Ann M. Irons")](https://www.ironscpa.com/) Hopkinton MA, CPA [Contact](https://www.ironscpa.com/contact-us) [Directions](https://www.google.com/maps/dir//Ann+M.+Irons,+CPA,+17+Main+St+Suite+1,+Hopkinton,+MA+01748/@42.2283595,-71.5220826,17.25z/data=!3m1!5s0x89e470559903948b:0xba338aa31b2a0f29!4m9!4m8!1m0!1m5!1m1!1s0x89e46e7ca0d1d73b:0x531938b62807ebe1!2m2!1d-71.5200665!2d42.2284497!3e0?authuser=0&entry=ttu&g_ep=EgoyMDI1MDExNS4wIKXMDSoASAFQAw%3D%3D) [![facebook](https://www.ironscpa.com/hs-fs/file-811720473-png/images/facebook.png)](https://www.facebook.com/AnnIronsCPA?ref=br_tf)[![LinkdIn](https://www.ironscpa.com/hs-fs/hub/332864/file-817405565.png)](https://www.linkedin.com/company/ann-m-irons-cpa-llc)[![twitter](https://www.ironscpa.com/hs-fs/hub/332864/file-817410620.png)](https://twitter.com/AnnMIronsCPALLC) # The Bean Counter with Ann M Irons, CPA --- [![Tax Year 2024 Business/Individual Tax Returns](https://no-cache.hubspot.com/cta/default/332864/aef2b35b-07b9-4f4e-be11-0410ebf842de.png)](https://cta-redirect.hubspot.com/cta/redirect/332864/aef2b35b-07b9-4f4e-be11-0410ebf842de) --- ## [Accounting for Lawyers: Which Entity Is Best for Your New Law Practice?](https://www.ironscpa.com/blog/which-entity-is-best-for-your-new-law-practice) Posted by [Ann Irons, CPA](https://www.ironscpa.com/blog/author/ann-irons-cpa) Nov 6, 2014 5:05:00 PM - [Tweet](https://twitter.com/share) ![tax-accounting](https://www.ironscpa.com/hs-fs/hub/332864/file-2063275311.jpg?width=350&name=file-2063275311.jpg)Now that you’ve earned your law degree, it’s time to make one of the most important decisions of your career: Should you go solo and build a new practice from the ground up, partner with a fellow attorney, or secure a position as one of several attorneys at a larger practice? ## Option 1: Sole Proprietorship It doesn’t get much simpler than the sole proprietorship, an entity owned by one person. This is an ideal choice for lawyers who want to retain total control over their practice rather than rely on shared decision-making. The sole proprietorship is a favorite among attorneys who take non-traditional approaches to practicing [real estate law.](https://www.ironscpa.com/blog/financial-management-advice-for-law-offices-internal-controls) ## Option 2: Partnership Partnerships consist of two or more lawyers, and all are jointly liable for any debts incurred by their entity. One advantage of the partnership over corporations is that it requires [less of an investment](https://www.ironscpa.com/blog/serious-about-your-startup-talk-to-a-bellingham-ma-cpa) up front. However, a partnership is not immortal; if one partner dies, the entity is dissolved. If you opt for a partnership, a Limited Liability Partnership is recommended because it affords some protection of the partners’ personal assets. ## Option 3: S Corporation An alternative to the traditional C Corporation, the S Corporation allows lawyers to bypass the thorny tax treatment that comes with Personal Service Corporations. As with a general corporation, an S Corporation allows for the [transfer of ownership](https://www.ironscpa.com/blog/financial-reporting-for-small-business-mergers-and-acquisitions), protection of assets, and longevity not tied to the lives of its owners. Under this arrangement, individual owners will receive a more manageable flow-through tax treatment. ## Option 4: Limited Liability Company An LLC is something of a hybrid between a partnership and a corporation. An Operating Agreement defines the requirements expected of each owner. While each owner, referred to as a *member*, does not haven personal liability, he or she is held responsible for any act of negligence or misconduct. An LLC may have only a single member, in which case it can be considered either as a corporation or as an altogether separate entity, independent of this member. Topics: [Accounting for Lawyers](https://www.ironscpa.com/blog/topic/accounting-for-lawyers) ## About **Ann M. Irons, CPA LLC** ![Ann](https://www.ironscpa.com/hubfs/images/Ann.jpg)Ann has spent over 25 years in the financial service industry, gaining knowledge and experience that allows her to provide an array of tax, and accounting and advisory services for her clients. Relying on a stringent code of ethics and a dedication to maintaining the highest industry standards, Ann works hard to ensure her clients receive the quality service they’ve come to expect. A member of AICPA and MSCPA, Ann has also had an article featured in the renowned publication, Banker and Tradesman.  ### Subscribe to Email Updates Search by Topic Search ### Recent Posts ### Posts by Topic - [Small Business Accounting (24)](https://www.ironscpa.com/blog/topic/small-business-accounting) - [Individual Income Taxes (18)](https://www.ironscpa.com/blog/topic/individual-income-taxes) - [International Tax (17)](https://www.ironscpa.com/blog/topic/international-tax) - [Accounting for Lawyers (11)](https://www.ironscpa.com/blog/topic/accounting-for-lawyers) - [Escrow Accounting (10)](https://www.ironscpa.com/blog/topic/escrow-accounting) - [Foreign Investment Tax (8)](https://www.ironscpa.com/blog/topic/foreign-investment-tax) - [Family Business (6)](https://www.ironscpa.com/blog/topic/family-business) - [Bookkeeping (5)](https://www.ironscpa.com/blog/topic/bookkeeping) - [Personal Finance (4)](https://www.ironscpa.com/blog/topic/personal-finance) - [Client Stories (3)](https://www.ironscpa.com/blog/topic/client-stories) - [Payroll Processing (3)](https://www.ironscpa.com/blog/topic/payroll-processing) - [Small Business Tax (3)](https://www.ironscpa.com/blog/topic/small-business-tax) - [Starting Your Own Law Firm (1)](https://www.ironscpa.com/blog/topic/starting-your-own-law-firm) - [Words of Wisdom (1)](https://www.ironscpa.com/blog/topic/words-of-wisdom) [see all](https://www.ironscpa.com/blog/which-entity-is-best-for-your-new-law-practice#) ## Inviting You to Visit Our Office! 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