Reply With QuoteI don't know all the differences but the LLC protects the owner(s) from being personally liable better than the INC
Can someone please explain the difference between a compny which is inc. and one which is a LLC. What is the benefit to each
thanks
I don't know all the differences but the LLC protects the owner(s) from being personally liable better than the INC
Depends what you are doing. My understanding is that if you are providing a service you can not set up your company as an LLC.
If you provide servies you can.
I used to work for three LLC (PricewaterhouseCoopers, Ernst & Young and KPMG). All three are partnerships. If you want a private company with multiple partners (owners) you go with a LLC, since they can not come after your own assets. Inc is for a public company or a company that wants to go public. LLC have lines of credit, Inc can borrow.
If you provide servies you can.
I used to work for three LLC (PricewaterhouseCoopers, Ernst & Young and KPMG). All three are partnerships. If you want a private company with multiple partners (owners) you go with a LLC, since they can not come after your own assets. Inc is for a public company or a company that wants to go public. LLC have lines of credit, Inc can borrow.
Thats funny, I have 3 LLC's and I borrow money like crazy!!
If you provide servies you can.
I used to work for three LLC (PricewaterhouseCoopers, Ernst & Young and KPMG). All three are partnerships. If you want a private company with multiple partners (owners) you go with a LLC, since they can not come after your own assets. Inc is for a public company or a company that wants to go public. LLC have lines of credit, Inc can borrow.
I have 3) S- corps none are public. 2) are plumbing related 1) could have been set up as an LLC but we chose to keep it the same as the other 2) for ease of paper work all 3) are multi partnerships. I'm not educated enough on corps and limited liabilities to say which is better, but I remember when we did the first one all the pro's and con's where presented and the S- corp was best for us. I was lead to believe that in our case we could not do an LLC because we offered a service.
Thats stretches my knowledge on the subject and each state maybe different.
Depends on the business and # of owners. Incorporating is not just for public/public wannabe companies. A standard 'C' corp gets taxed on all revenue, then you get taxed again when paying out the profit to the ownership. An 'S' corp is similar to an LLC in that the revenue is not taxed until paid out. An 'S' corp has rules about payouts though; if there are multiple owners, the owners are taxed on their respective percentage of the payout, whether they take the payout or not. So if you want to build company capital it's a little more tricky with an 'S' corp.
My suggestion would be to spend a few bucks and see an accountant or financial advisor. They'll be able to give you many options based on your particular situation.
This is a question for a CPA. If you anticipate bringing on partners or giving out equity in the future I believe you should set up a C-Corp. If you just want to own the business yourself with no partners then the S-Corp is the way to go. If there are multiple owners and you don't plan on bringing any more on after you commence ops, then an LLC could be the way to go. The LLC I think requires additional paperwork because you have to do corp as well as partnership filings at the end of the year which is a waste of time/money unless you really need it.
This is all based on memory of discussions with my CPA so take it for what you paid for it.
As Howie and others pointed out you really need to speak with an accountant or CPA since each type has its own tax advantages/reporting requirements. The next best thing is www.nolopress.com .
As far as liability and in general to enjoy the protection of an LLC or corporation you must act like a corporation. This includes annual meetings/minutes, and the timely filing of taxes with both the Secretary of State and State/IRS. In short, if you set up a corp just to dodge liability it wont work.
And corps and LLCs are perpetual meaning they exist forever unless you dissolve them with no taxes owing. So dont file one unless you have your ducks in a row and are prepared to pay a minimum yearly tax amount.
Dont buy into the whole Nevada corp. sales pitch pretty much every state requires you register in the state you transact business in so even if you file in NV, you would then be required to register in AZ, paying more fees.
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I have an LLC and i am sole owner with no other memebrs
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