When you incorporate a business, you evolve from a sole proprietorship (or general partnership) into a company that’s formally recognized by its state of incorporation. In other words, it becomes a legal business entity of its own — separate from the individuals who founded it. The new company structure often falls into two categories: a limited liability company (LLC), or a corporation (corp). In this article, we’ll be focusing on LLCs, as well as two popular types of corporations — an S corp and a C corp.
No matter how you choose to incorporate, there are certain benefits you can expect — like being shielded from personal liability, as well as increased credibility with customers. There are also additional advantages and disadvantages associated with each incorporation type.
LLCs protect business owners, also referred to as members, from being held personally liable for the actions of the LLC. This limited liability typically protects you from the personal risks involved if a lawsuit were to arise concerning your business — safeguarding your personal assets. A couple additional benefits of an LLC include:
All incorporation options are not created equal. When deciding between a corp vs. LLC, the best choice for your business not only helps you start off on the right foot, but also acts as a foundation for your company’s ongoing success and growth. As you consider which business type is right for you, thinking both about your short and long-term goals for your company is advisable.
The cost is $300 to open new company. With that we will provide you with: