| Many new entrepreneurs are looking at the options | | | | annual meetings. |
| before them and are bewildered. Choosing a type of | | | | LLCs intrinsically have the same personal liability |
| corporation or company to create to shield you from | | | | protection as a corporation. The administrative |
| personal responsibility for your business dealings is the | | | | requirements are less. LLCs are not usually required to |
| overwhelming impetus for finding out about various | | | | hold meetings or produce detailed meeting minutes |
| incorporation options. | | | | (goes by state). LLCs have tax advantages like |
| Virtually all states allow the following: LLC (Limited | | | | flow-through or pass-through taxation. If they choose, |
| Liability Company); S-Corp - sometimes called | | | | an LLC can also be taxed as a regular corporation. |
| subchapter S incorporation. This is a profit corporation | | | | Here are a few points for each, so you can compare |
| with the "S" designation from the IRS (Internal Revenue | | | | the various options: |
| Service); Profit or C-Corporation; Non Profit | | | | C Corporation |
| Corporations. | | | | - Personal liability protection for owners |
| Both LLCs and corporations can be great choices for | | | | - Profit can be distributed among owners and the |
| entrepreneurs that want to protect their personal | | | | corporation - effectively lowering the tax rate |
| assets from being seized in case of law suits against | | | | - Requires formal meetings and meeting minutes |
| the business. Corporate entities and LLCs provide a | | | | (detailed notes) |
| layer of protection that most find well worth the effort. | | | | - Annual state reports |
| In addition to the lessened liabilities there is another | | | | - No restrictions on membershipS Corporation |
| reason to form an LLC or corporation, and that is for | | | | - Liability protection personally for the owners |
| funding. Loans are more likely to be made to LLCs and | | | | - Profit or loss flows to shareholders |
| corporations than they are to sole proprietorships. | | | | - Need formal meetings and meeting minutes (detailed |
| Form an LLC to gain some credence for your | | | | notes) |
| business among lenders and other businesses. | | | | - Annual state reports |
| Each business type is treated a little different by the | | | | - Maximum of 100 shareholdersLLC - Limited Liability |
| IRS and has pluses and minuses associated with them. | | | | Company |
| Picking the one that is best for your situation depends | | | | - Liability protection personally for owners |
| on the needs of you the owner, the number of staff | | | | - Profit or loss flows directly to members |
| you will have, and other needs of the business you are | | | | - Choice of taxation as LLC or corporation |
| involved in. | | | | - Annual state reportsMany one-person businesses |
| Corporations offer personal liability protection, tax | | | | find LLC the way to go, and, in fact the LLC has |
| savings, and increased opportunities for raising capital. | | | | caught up to or surpassed regular C-Corporation filings |
| Administrative practices are part of corporations - like | | | | in many states. Consider the LLC as the right choice |
| keeping detailed transcription or meeting minutes at the | | | | for your new business. |