Hey guys I have heard from people an LLC is the simplest way to protect you, I also heard an INC is the best way too. What is your opinion and can you offer me any resource sites so I can research about it?
LLC or INC
- Thread starter JMusto0223
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i own both a part of an LLC and an S Corp and honestly its not that different for me between them.
I'd say an LLC is the easiest. Either way is fine. One thing to check is your state laws regarding LLCs as those can vary.
I'd say an LLC is the easiest. Either way is fine. One thing to check is your state laws regarding LLCs as those can vary.
INC == c-corp or s-corp
C-CORP == IBM, etc. (I'm sure you don't need this one, just yet)
S-CORP == You can have up to 40 equity holders (I think)
LLC == Usually people choose single member LLC (can include wife, if you have one)
From personal liability perspective, LLC and S-Corp provides same protection. In addition, both can be structured so that earned income is passive (meaning you declare the income on your personal income tax) so you don't pay double tax
LLC is very simple to create and maintain (and annual dues are usually inexpensive);
S-Corp is more intensive about keeping paperwork and can be more expensive.
I would go with LLC unless you plan on selling equity stakes of your company to others to raise money; Just make sure to create a separate business bank account, tax ID, mailing address (like UPS store), etc to make sure you don't "pierce" that personal liability veil.
C-CORP == IBM, etc. (I'm sure you don't need this one, just yet)
S-CORP == You can have up to 40 equity holders (I think)
LLC == Usually people choose single member LLC (can include wife, if you have one)
From personal liability perspective, LLC and S-Corp provides same protection. In addition, both can be structured so that earned income is passive (meaning you declare the income on your personal income tax) so you don't pay double tax
LLC is very simple to create and maintain (and annual dues are usually inexpensive);
S-Corp is more intensive about keeping paperwork and can be more expensive.
I would go with LLC unless you plan on selling equity stakes of your company to others to raise money; Just make sure to create a separate business bank account, tax ID, mailing address (like UPS store), etc to make sure you don't "pierce" that personal liability veil.
I second what spock said. I own one S-Corp and two LLC's
LLC is the easier form to maintain. S-Corp (or C-Corp) has to have documented shareholders meetings and board of directors meetings and list the president, secretary, and treasurer.
LLC and S-corps can be treated the same way as far as taxes go. The earnings will pass to the owners personal taxes on a schedule K form.
Alot of companies either form in Nevada or Delaware. Here is a link to a company I have used for two of mine. Delaware Incorporation Services from The Delaware Company
You can set up everything for about $300
They also have a FAQ on what type would best suit your business.
Oh.... one of the benefits that makes Delaware popular is that you do not have to register your members with the state. That way it is more private.
J
LLC is the easier form to maintain. S-Corp (or C-Corp) has to have documented shareholders meetings and board of directors meetings and list the president, secretary, and treasurer.
LLC and S-corps can be treated the same way as far as taxes go. The earnings will pass to the owners personal taxes on a schedule K form.
Alot of companies either form in Nevada or Delaware. Here is a link to a company I have used for two of mine. Delaware Incorporation Services from The Delaware Company
You can set up everything for about $300
They also have a FAQ on what type would best suit your business.
Oh.... one of the benefits that makes Delaware popular is that you do not have to register your members with the state. That way it is more private.
J
I have both but if you have an S corp you can still file as an LLC. Thats how my CPA prefers to do it. However my other CPA clams that an LLC is the best way to avoid a lot of taxes. So I would say either one is fine just don't do a C corp. Good luck with your business 
There are actually lots of advantages to a C-Corp. The main one for me was that I am able to deduct 100% of my medical costs. An S-Corp doesn't allow you to do this.
It's different for everyone and you should talk about your specific situation with your accountant.
It's different for everyone and you should talk about your specific situation with your accountant.
Best Corporate Structure for Affiliates - Make Money Online
Explains my entire process and which is best for you...
Explains my entire process and which is best for you...
This is to avoid state taxes right? I still don't understand if I would be liable for paying state taxes in the state of california where i reside though if I were to set up an llc or corporation in a tax free state. Does anyone have any info on this?
California requires you to pay all state income taxes as long as you are a resident there. Legally if you reside in California and you form a corporation in Nevada/Delaware you would still be required to register as a foreign corporation and pay all state income taxes as well as California franchise taxes.
The only way to avoid California income taxes is to move to a state that has none. i.e. Nevada.
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