LLC or Inc. Which is better?
Clients often call me to find out whether it is better to form an LLC or Inc. They want me to tell them whether to form a Limited Liability Company or Corporation? They want to be certain that they will get all of the good asset protection and tax advantages they can for their company. As with everything, there are several important considerations that you should take into account to get the right structure for your business.
Business Structuring- LLC or Inc?
There are many types of business structures available. There are sole proprietorships, partnerships, LLC, LLP, C and S Corporations. The best way to decide which business structure you should form is to consider asset protection, taxes and ease of management. In the LLC Wizard there is a company decision chart to help you make certain that you make the best choice.
Generally an LLC is the default choice for a business structure. It works great for most people. It is quicker to form and easier to maintain an LLC and you get just as much asset protection. Another bonus is that you can elect how you want to be taxed. The IRS lets you choose. To make this choice you need to file the election form on time. I walk you through all of this tax structuring in the LLC Wizard.
The best part of the LLC is the double asset protection you can get if you make the correct choices in your structure and choose the correct clauses in your documents. This is all done in the operating agreement. I am amazed at the number of people who come to me with an LLC who have no operating agreement. Make sure you have a good operating agreement. This is the heart and soul of your business.
