If you're starting a business, it's a good idea to consider what your company's corporate structure will look like. Incorporating your business is an important step that lays the foundation for it to grow. However, there are several options to choose from, and some may be better suited to your particular venture.
Here are some of the structures you can select for your business.
Limited Liability Company (LLC). When you incorporate your business as an LLC, you may receive an advantage from having the tax benefits you would have as a partnership while receiving the same liability protection as a corporation. Some of the additional benefits this structure provides are limitation on personal liability and the option to be viewed as an S-Corporation.
C-Corp. You may have heard of the terms C-Corp and S-Corp. With a C-Corp, your business becomes a separate legal structure, meaning that your personal assets stay protected from potential liability. Some of the benefits of this choice include increased credibility, limited personal liability and potential tax advantages. Additionally, if you decide to transfer ownership, this structure makes it easy to do so.
S-Corp. While a C-Corporation may be subject to double taxation, one of the benefits of an S-Corp is that it may only be taxed on one level. This allows for shareholders to report on losses and profits on their tax returns. An S-Corp only has to file taxes once a year, and may have tax deductible business expenses.
Unless you are creating a non-profit corporation, you will likely be selecting one of the aforementioned entities. An online incorporation services company can answer any questions you have about incorporating!