4 U Tax and Accounting
For more information or help with setting up your business, please call and schedule your no-cost, no obligation consultation.
Give to everyone what you owe them: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor. Rom. 13:7
Choosing to incorporate or form an LLC is an important decision. Take your time making this decision on forming your ideal business structure. If necessary, we can help or you can consult with an attorney.
Note: LLC owners can elect for the IRS to tax the LLC as a sole proprietorship, partnership, C Corporation, or S Corporation. Owners make this election through the IRS after the company forms with the state of its choosing.
• cannot engage in corporate income splitting to lower tax liability
• cannot issue stock
• double taxation of corporate profits and shareholder dividends
• must hold annual meetings and record minutes
• s corporations have restrictions on number of owners
Disadvantages of a LLC Disadvantages of a Corporation
• may issue shares of stock to attract investors
• corporate income splitting may help lower overall tax liability
• no limit on the number of owners
• profit and loss are passed through to the owners' individual tax returns
• no annual meeting or minute book requirements
Advantages of a LLC Advantages of a Corporation
It is a common question many small business owners face when they hope to take their enterprise to the next level. Small business owners should consider the advantages of both a corporation and a limited liability company (LLC) and which one is better for their company's short-term and long-term goals when forming a new company. Weighing the options and comparing incorporation vs LLC is important when selecting the right structure to help maximize the chances for success. Though corporations and LLCs can both help protect personal assets from business debts and any potential lawsuits or judgments made against your business entity, an incorporated business and an LLC offer a difference in benefits.