Must CPAs set up a separate entity, such as an LLC, to offer insurance services? Isn’t this entity an obstacle to “getting started” in the simplest way possible?
The separate entity is not essential. But according to several CPAs with expertise in this area, a separate entity offers more flexibility than including insurance or securities business within the CPA firm itself. For example, the separate entity can hire its own employees and create a revenue-sharing relationship with an insurance firm. The activities of any such employees or affiliated professionals who are not CPAs would not be subject to the CPA’s Code of Ethics. Setting up the entity usually is not an obstacle. It represents a commitment made by the principal or partners of the CPA firm to support the endeavor and perhaps provide modest start-up funding.
Related Questions
- Must CPAs set up a separate entity, such as an LLC, to offer insurance services? Isn’t this entity an obstacle to "getting started" in the simplest way possible?
- Does the carrier offer claims and risk management services as part of the insurance product, or are these unbundled at a separate cost?
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