Limited Liability Company ( Llc )

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Alternative 1. Limited Liability Company (LLC) The first alternative is a Limited Liability Company or abbreviated a LLC. “As an LLC your personal assets are protected from lawsuits and business debt, and only assets of your company can be touched by lawsuits and creditors” (Small Business – Chron.com, 2015). With a LLC you have plenty of advantages to include the benefit of always upgrading to another business organization and having the security and peace of mind of limited liability. It is also easier to form than a corporation. There are also disadvantages to include self-employment taxes. “Unless you choose to be taxed like a corporation, LLCs are usually subject to self-employment taxes. This means that the profits of the LLC won’t…show more content…
Corporation The second alternative is a corporation. One can form as an S corporation of C Corporation. “A C corporation is double-taxed. The corporation pays taxes, as do the company’s shareholders. S corporations are single-taxed. All taxation and business expenses are paid for by the company’s shareholders” (Small Business – Chron.com, 2015). There are some advantages to this form. You are not personally liable for lawsuits and debt. It is easier to attract investors for your business. S corporations are “limited to a maximum of 100 shareholders and a C corporation can have unlimited shareholders” (Small Business – Chron.com, 2015). The corporation is “a stand-alone entity, which means you are not personally liable for the assets and debts of the business” (Small Business – Chron.com, 2015). “The stand-alone entity also separates tax liabilities, which is another advantage. This means that the corporation taxes are separate from your personal tax liabilities. As a business owner, you are responsible for paying taxes only on the money the corporation pays you in the form of a salary, commission or dividends--this is on your personal tax return. The corporation is responsible for paying corporate taxes (at the corporate tax rate) on any profit the company makes” (Small Business – Chron.com, 2015). There are also some disadvantages. First, the costs can be a disadvantage. “One of the primary disadvantages of a corporation is the costs for running a corporate form of
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