S-Corp vs LLC

Well, the time has come for me to try to take my business to the next level and I want to protect my personal assets before I do so. I am looking in to either a LLC or S-Corp. Does anyone have any opinions on which would be better? I mean what advantages if any does one have over the other? Also, is this something I should be hiring a lawyer for or can I handle this myself? Thanks in advance for any help you can give me

 

An LLC is MUCH easier to form; does not require an annual meeting and detailed minutes; there is no limit to how many people can join an LLC (great if you ever want to partner up); you don't need to document ownership of "stock", you can distibute earnings as you wish.

The benefits, IMHO, of an S-Corp come only in relation to a regular C-Corp.

Hope this helps.

 

LLC is the New Recomended method. I own LLC, C-corp and S-corp.
LLC Has members not shareholders so you usually never have as many owners and it a little more difficult going public or raising capital selling portions as there are no shares involved. The LLC profits can be passed on the the owner and losses tooken out of your personal gains from other ventures or work that you do. The upkeep of the llc is alot easier as not required meetings and minutes and meetings and you have the same corporate protection as the C corporation for personal liabality.
C-Corporation is double taxed but you can have unlimited owners and pay your self a large check to get around the double taxation. You also have to pay taxes every quarter and do minutes and meetings and if you don't upkeep this is will pierce you corporate veil. Go part is if you go public you can sell off a ton of shares for investment capital for quick growth. C corps provide great protection for liability. Look for a state to incorporate in with no franchise or state tax Nevada, Wyoming, use to be deleware but their not as business friendly.
S-Corporation. You can 1099 regurlar employee's. You can pay taxes at end of year instead or quartly. But you are limited to the amount of shareholders. I know in some state the viel has been pierced and they have came after personal assets. Usually they don't do this unless you are in a grey almost black area of business. You not double taxed.

I recomend these choices.

1. looking to build fortune 500 company C-Corporation
2. looking for easy form to incorporate without alot of hassle protecting personal assets without alot of knowledge of working with minutes and resolutions, also can pass losses in begining of growth stage with other profits LLC
3. Looking to file taxes once a year with limited growth maybe up to 25 million limited amount of shareholders not single taxation. s-corporation. Need any assistance just shoot me a pm.

Experiance: Build Corporate Credit Lines for New Companies

 

Wow thanks for the great advice guys. I think I am gonna go the LLC route for now. I don't want to deal with the hassle of meetings and all that other junk. I really appreciate the help. I found a web site LegalZoom that claims they can file all the paperwork for you for like $239. Is this something you would recommend or do you think it is something that I can handle myself? Thanks a bunch I am throwing some rep at both of you.

 

Legalzoom rocks if you're not going to hire a lawyer. Otherwise I highly recommend against doing it yourself. You will lose money with the time and hassle of getting all the ducks in a row yourself. Pay someone else or a service who is more knowledgeable.

good luck

D

 

Sounds like LegalZoom it is then for the LLC. Thanks again guys.

 

Make sure legal zoom is including the filing costs in the price, not just charging you 239$ for the work.
What state are you in?

 

No the filing costs are not included in the price but I was aware of that. I am in Pennsylvania so I think the fees are $265. The $239 package comes with some other tax information and getting started stuff that I would like to have. And then another $25 fee for them to prepare my Tax ID application. In total it looks like its gonna cost $539. Sound worth it?

 

If you don't know what you're doing, $200-$300 is nothing. At least it will be setup right.

 

Most of the companies I do are Nevada or Wyoming. Not to many delaware companies although this use to be a great state to incorporate. Pennslvania is not that popular of state to incorporate in for tax advantages,etc...... Yes if you don't no what you doing that is alright. You can call irs and they will give you a ein or tax id number for free. Go to the states websites and you can generally see a copy of a filed llc and just copy the same information but with your name and you as sole owner or member/manager since its a llc. You can google LLC samples and you will see all you need to fill in on the form and you can get copys of the forms form the state website. Now thats the cheap method becuase its pretty easy to do. But if you think you time is worth more than the 2-3 hours it will take doing it by all your means pay legal zoom. Best wishes and welcome to one step closer to your dream........
Best Wishes.

 

As soon as your business profits start to hit the $90,000 mark, when you file the taxes for your LLC elect to be taxed as an S-corp by filling out form 2553. You will save a lot on self employment taxes.