Tips for Choosing Between A Limited Liability Company and Corporation
Deciding on either form a limited liability company or a corporation is challenging when you have decided to move to the next level in your business and incorporation. With any of the options, you get to enjoy limited liability protection to protect your assets from your business liabilities as well as mortgages. However, there are still other differences between these two legal entities and the choice you make is going to impact your business in a big way. Below is a guideline to help you make the right choice between the two. Basically, a limited liability company is a pass-through entity which is also among the most popular choices for small businesses.
A limited liability company is flexible hence many people choose to form it. Income from the company can be passed through to particular members who give their share on the tax return, or through a C corporation or an S corporation. There are nor management or specific structural requirements that are supposed to achieve through a limited liability company. Managing their limited liability companies with owners or members is what many people choose to do. They can, however, also choose to build a limited liability company with a board of managers. A limited liability company offers you with limited liability protection to your assets in case your business fails to pay debts or issued.
Corporation, on the other hand, is usually a better choice for larger companies since there are no strict requirements that need to be met. However, a corporation must have a primary management structure which consists of a board of directors. Other requirements for a corporation is to support and present reports, to hold regular meetings, and also preserve minutes. Unlike a limited liability company … Read More