What it is & why it's best for beginners.
Need An LLC or C-Corp? We Got You Covered!
*Please note that we do our best to adhere to our posted pricing schedule. However, there may be situations that require a little more work to be done or circumstances that will add additional forms. In such a case, the price will be increased and we will inform you before hand as to what caused it and give you the option to proceed. That being said, please keep in mind also, that once we've been made aware of something that must be reported on your tax return, we are obligated to report it. So, therefore, if you wish not proceed with the increased price, we will have to respectfully discontinue with the entire process.
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What's The Big Deal With An LLC Anyways??
However, before we begin, please note that I have been in this industry for over 13 years and I have been to many business seminars and conferences. And for some reason or another, the idea that you need an LLC to start your business is always spouted out of the mouths of those who are speaking.
Now, I don’t necessarily agree with that sentiment which is why I made a video about it, but if you are here on this site, I am going to assume that there are some great things happening in your business and it may be time for a change.
As I’ve stated throughout this site, in order to be an S-Corp, you do need to first be an actual entity. Meaning that you must first be either an LLC or a regular Corporation (C-Corp). But, at the same time, I’ve also said that this option is not for everybody. So careful consideration must be made when deciding to take this step. Therefore, I am going to do my best to share you with the differences between the different types of entities.
What is an LLC?
An LLC, like any other entity, is formed at the State level. Meaning that in order to form an LLC you generally must file an application with the Secretary of State of your state. The letters in LLC stand for Limited Liability Company. It’s important, however, to understand what those letters really mean. The words Limited Liability means that the risk of taking on debt and responsibility that the company created is limited. It DOES NOT mean that you are 100% free and clear.
The word Company is there on purpose. It’s there because an LLC is a “Company” and not a “Corporation”. I know a lot people will say that LLC stands for Limited Liability Corporation but that is incorrect. I like to consider LLC a slimed down version of a Corporation. Meaning that, by law it is a separate entity from its owners, but it does not require all the administrative, tax formalities and paperwork that a Corporation requires. And because of that it’s an excellent choice for those who are on their way to becoming a successful business.
LLC vs. Corporation
I like to say that an actual formation of a Corporation is more reserved for the big conglomerates. The reason is Corporations come with a lot of responsibilities. There needs to be a board of directors, they are taxed twice and they require a ton of paperwork. The one advantage that Corporations have over LLCs is the actually liability. Remember that the first initial in LLC stands for limited, which means that you are… well… limited.
However, with a Corporation, the shareholders are not responsible at all. Now, of course that all depends on how it’s ran and operated, but if done properly, a Corporation is a great shield of protection for it’s owners. Corporations are also formed at the State level and is done so by filing what is called Articles of Incorporation. An LLC files what is called Articles of Organization. See the difference?
Not that it matters, but I’m of the opinion that if you are sticking to a local market and it’s just you and maybe a few employees, then consider forming an LLC first (you can always change to a C-Corp later). The reason is because even though we’ll be here to help you transition, we can’t be responsible for everything. Therefore, it’s better to keep your administrative duties as low as possible so that you can focus on the money-making activities of your business.
So when you are ready… so are we!