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    5 Replies Latest reply on Feb 5, 2016 7:49 PM by asit99

    LLC vs Corporation.

    asit99 Adventurer

      I did some analysis but would like to throw this question to the community. What is a best way to form a company that you want to grow. LLC or INC?

        • Re: LLC vs Corporation.
          Moderator Rebecca Guide

          Hi asit99!  Welcome to our community!  Choosing the correct business structure for your company may be one of the most important decisions you'll ever make, so you're wise in trying to get all the information you can. Steve Strauss, one of the world's leading experts on small business has written a great article, Choosing the Right Structure for Your Business, that lists the pros and cons of the different formats you can choose from.

           

          Let us know a bit more about yourself and your business and we'll be able to give you some better direction. I know that many of our community members have been thru this decision making process before, and hopefully will chime in with their experiences.  Remember, it's always wisest to speak with your accountant and/or financial adviser before making any big decision.

           

          Cheers!

          -Rebecca

          • Re: LLC vs Corporation.
            Roger Dillon Scout

            Hi asit99,

             

             

            The first thing you know, what is the difference between LLC & Corporation.

             

             

            Advantages:

            LLC

            1. No limit on the number of owners

            2. Profit and loss are passed through to the owners' individual tax returns

            3. No annual meeting

             

             

            Corporation

            1. May issue shares of stock to attract investors

            2. Corporate income splitting may help lower overall tax liability

             

             

             

             

            Disadvantages:

            LLC

            1. Cannot engage in corporate income splitting to lower tax liability

            2. Cannot issue stock

             

             

            Corporation:

            1. Corporation corp tax structure requires double taxation of corporate profits

            2. Must hold annual meetings

             

             

             

             

            Hoping these points are helping you for the right decision.

             

             

             

            Roger dillon

             

              • Re: LLC vs Corporation.
                asit99 Adventurer

                Thank you Roger and Steve (the article link). The information you provided is to the point and precise. As per Steve, it is so important to choose the right path now than take the short approach. I am going to speak with CPA. One more puzzling piece to my activity is that I have two diverse entities. One is related to IT and the other a franchise in food industry. If I form a corporation, is it allowed to operate under the other?

                And thank you Rebecca.