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Corporation or LLC right for my business?
There are many types of business entities, the simplest being sole proprietorship and general partnerships. While these may be easiest to form, they offer no personal liability protection and no significant tax advantages for their owners. Forming a Corporation or Limited Liability Company will protect your personal assets (homes, cars, investments, etc.) from any possible creditors; liabilities or lawsuits brought against the business. Incorporating will make your business more credible and attractive to customers and investors. In addition, these types of entities offer numerous tax advantages for owners and shareholders. We do suggest that the selection of a business entity be done with the assistance of a professional, such as your tax or legal advisor, as they may be more familiar with your specific needs.
Structuring Your Business
The way your business is organized is important because it affects every aspect of your operation, from what you pay in taxes to the extent of your liability and your ability to raise capital. Your options for business organization include sole proprietorship, incorporation, partnership, limited liability corporations and partnerships, and special corporations such as professional and non-profit corporations.
There are a lot of opinions about business structure, so be sure you make a decision only after thorough research and careful consideration of what is best for your business. Remember that you can alter your business structure as your needs and requirements change. You're not locked in to keeping a specific structure if it no longer serves your company.
This overview is designed to assist you in making this key decision by giving you information on the basics of the various business structures. Once you've read it through and done your research, you might want to contact your attorney or accountant and seek his/her input and guidance.
C Corporation
Closed Corporation
S Corporation
Limited Liability Company
General Partnership
Limited Partnership
Professional Corporation
Non-Profit
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