LLC vs S Corp vs C Corp vs Not Incorporating at All
Although many small businesses start as sole proprietorships, as they grow and expand, several will revise their business structures to corporations or LLCs.
At first, the process of incorporating may seem expensive and complicated, and maybe not even worth the effort. However, incorporating does offer several advantages, so it’s worth educating yourself on your business options.
Yes, there is a cost and additional paperwork associated with incorporating your business. However, there are several advantages, including tax savings that can often outweigh the price of incorporation.
Each business is different, and in fact every state has it’s own rules, so it’s best that each business decides for itself. There is no perfect solution that fits everybody.
How to Find Out…
The best way to do this is to do your research. Find out the benefits to each business structure. Compare the benefits to the costs for your particular business, and you’ve got your answer. To get this information, you can meet with an attorney or you can find a lot of the basic comparative information online.
A good place to start is incorporation websites. Yes, they are bias because they provide incorporation services. However, since they are active in the field, they tend to be the most knowledgeable as well.
They can give you the basic facts in easy-to-understand layman’s terms, which many times can provide you with enough information to make an intelligent decision for you company.
If in doubt, it doesn’t hurt to contact multiple sources to get a few different opinions and answers. In this case, the more information you have, the better armed you are at making your decision.
Resources to Compare LLC vs S Corp vs C Corp, etc…
The Company Corporation, also known as Incorporate.com, has some great articles on their website explaining the variations between the different structures (C Corporations, LLCs, Partnerships, S Corporations and Sole Proprietorships). In fact, these guys have been in business for over 100 years.