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Choosing a Business Structure LLC Vs C-Corp

Choosing a Business Structure LLC Vs C-Corp

As promised, here is your followup query submitted by Jon who's debating the virtues of choosing an LLC or a C-Corporation or an S-Corporation, in addition to wondering where to set up this organization. Generally, I'd lean to forming an LLC since it's quite a simple set up, you can certainly do yourself, and also the charges for setting it up (not counting California) are fairly cheap.

You obtain the limited liability that you require, and you also get pass accounting for losses and profits with no"double taxation" you've used a C-Corporation. Sounds fantastic, right? Well in most circumstances, it's, which is the reason you see so many companies set up as LLCs today. If you want to start your own LLC then you can search for tips online.

Choosing a Business Structure LLC Vs C-Corp

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My first company was an S-Corp, which provided a number of the very same advantages, but that was before LLCs existed. Ever since that time, all my companies have begun as LLCs. As they climbed, they shifted to C-Corporations for reasons I will explain below.

First off, I figure for what kind of thing to set up the most important issue I'd initially was if to become an S Corp or LLC. It appears those two are the very best ways to go to my friend so far as shielding his private assets and pass-through taxation. LLC seems somewhat more elastic than S corp., but the LLC must cover SE taxes, at which I feel that the S corp either does not (or has to deduct them). The two LLC and S corp prevent the double taxation a C corp would deliver on, right?

Similarly, there are also limits on the way you share gains and losses among investors. You most likely don't need to mess with this, and LLCs permit you to prevent all that paperwork, and also to divide profits and losses nevertheless your LLC Operating Agreement dictates, irrespective of shares held.