How much do you value your accountant? If you answered “plenty!” then you’re in good company.

According to a survey* by Wasp Barcode Technologies, small business owners ranked accountants as the most important professional to their businesses. Not surprisingly, when asked how familiar the business owners are with accounting functions, most answered in the middle range. Most business owners would never attempt to file their business taxes without the help of an expert accountant, so why wouldn’t you turn to your accountant for help with business formation, too?

Most business owners hire an accountant for taxes and accounts receivable purposes. However, getting the accountant involved in business formation starts the ball rolling on how accounting functions will be set up; how your business’s legal structure will affect your business taxes; and how to handle payroll, invoicing, bank loans and much, much more.

Business Formation Options

The type of business entity you choose has legal, financial and administrative implications, so you don’t want to start out on the wrong foot. Using an accountant for this stage of business formation is crucial. Choosing a business structure determines what kind of taxes your company is subject to, your personal liability and what kinds of compliance requirements you need to satisfy going forward. It also affects your ability to get credit and funding.

The most common forms of business are sole proprietorship, partnership, corporation, S corporation, and LLC.

1. Sole Proprietorships

Sole proprietorships are the most common form of business organization in the U.S. because they are easy to form, and the owner has complete control of the business. Profits are passed directly through to the owner, and business income and expenses are reported on the individual’s tax return. The tax rate is based on your personal tax bracket. Most single owner businesses file quarterly estimated taxes. As a sole proprietor, you are required to pay the entire amount of your social security and Medicaid contribution. As far as liability, since there is no distinction between you personally and your business, you are personally liable for your business if, for instance, someone takes you to court. You can buy liability insurance to help cover these expenses. Lenders will approve you for business loans or credit based on your personal credit rating and personal risk factors.

2. Partnerships

Partnerships are like sole proprietorships with two or more owners sharing the liabilities and financial responsibilities. A partnership agreement documents detail each owner’s responsibilities, their stake in the formation, how profits will be distributed, how decisions will be made and disputes solved, and what happens if the business is sold. The same pass-through taxation applies to partnerships as it does for sole proprietorships; however, if one partner is delinquent in payments to the IRS, the other partner or partners named in the agreement are liable.

3. C Corporations (C Corps)

Corporations might become more common as the new tax laws make it monetarily beneficial to be a C Corp. In the past, corporate tax rates have been similar to individual tax rates and vary depending on profits and income. Under the new tax law, however, C Corps will be taxed at a flat rate of 21 percent. C Corps offer the best protection from personal liability because the business is a separate entity from the owners and shareholders, so personal assets cannot be affected by the actions of the corporation. A corporation can also sell stock or shares, and to go public the business must be structured as a C Corp. Because the corporation is a separate entity, the profits and losses of the corporation are reserved for the corporation. If owners or shareholders receive dividends, they are taxed on their share of the dividends. The biggest downside of becoming a C Corp is the amount of paperwork and filing fees involved.

4. S-Corporations (S Corps)

S Corps have some features of the sole proprietorship and some of the C Corp. Profits and losses are passed through to owners and shareholders, but owners can separate their personal assets from the business assets and are thereby protected in case any judgments occur against the business. Like a C Corp, an S Corp must adopt bylaws, hold annual director and shareholder meetings, and keep meeting minutes with corporate records. Some states do not recognize S Corps and will tax these businesses as a regular C corporation.

5. Limited Liability Corporations (LLCs)

LLCs are similar to the S Corp when it comes to taxation and liability but looser when it comes to formal internal requirements. Owners are called members and an LLC can choose whether or not it wants to be taxed as a sole proprietorship, partnership, S Corp or corporation. In most states, an LLC does not have to hold an annual meeting, and if the LLC chooses not to have a board of directors, it doesn’t need to. Plus, there is less paperwork and recordkeeping involved in an LLC as compared to a corporation.

Other Accountant Duties

Besides legal structure, your business formation involves setting up an accounting system—software, expense, and receipt organization, invoicing, payment terms, receivables, bank loans, credit cards, and all the processes associated with your business’s finances. As a small business owner, you must keep tabs on your business’s finances and at the same time woo new clients, manage employees and make sure you’re following the laws and regulations of your industry. Outsourcing certain tasks to an accountant allows you to concentrate on growing your business and not get buried in numbers.

I’m not suggesting you can be hands-off. Work with your accountant to make decisions on important issues such as expense limitations, terms of receivables, ways to cut costs and how to manage cash flow concerns.

A good accountant can save you money by recommending smart tax planning strategies for both your business and your personal taxes; can help you set up a retirement plan, and can help you get financing when needed. Shouldn’t you have your accountant in your corner when it comes to business formation, too?

*Wasp Barcode Technologies survey access.