LLC. vs INC.

[vinylbarry]

Hello,
Me and my better half are looking into the LLC. vs the INC.
We would like to hear from others who are one or the other advantages vs disadvantages and has your LLC. or INC. been good choice for your company.
Thanks

 

[vinylbarry]

No Comments??

:Sleeping:

 

[high impact]

I have a real estate company that we established as an LLC, but for our (wife and I) other service based companies Inc. was better for us. I recommend for you to check with your attorney and cpa for specific advice concerning your needs and tax position.

 

[iSign]

LLC has been an excellent choice for me.

The first 2 years after I restructured to an LLC, I had fairly large profits, but I kept my wage reasonable & saved on self employment tax. This year I've re-invested so much, I won't be paying much tax anyway, but as I have accumulated some assets over the years, it's nice to know they are somewhat sheltered now.

 

[binki]

C-corp has more advantages to LLC. You can have more or less unlimited benefits without tax where LLC has some limitations. Also, the C-corp can have retained earnings and can have a fiscal year other than a calendar year which may have some benefit.

As far as payroll tax, the IRS has refused to rule on whether distributions from an LLC are subject to payroll taxes.

There is a lot of good info about this on taxguru.net and taxguru.org.

 

[WILLIAMS]

S-CORP INC here.... consult your CPA

 

[vinylbarry]

Does one seperate your personal assets vs your company assets.

Example 1
If someone is sued via personal such as a car wreck is there business protected so you dont loose your business?

Example 2
Say as I have read on here going down the road and a sign goes out the back of your truck and hits a car and makes that car wreck is your personal assets protected in the future lawsuit that would happen?

Another question what was your avg. cost to set it up through your attorney?

Have been reading all night we are really looking into doing this first of the year and want to choose the best one.

 

[binki]

Both forms protect your personal assets as long as your business and personal finances and actions are not mixed. As far as reaching the business from the personal side, I doubt it with a C corp, except for maybe your stock ownership, not sure about the LLC.

For setup, $2500+ for an attorney, $400 or less using a service like legalzoom.com.

 

[ChiknNutz]

We went S-corp the beginning of this year based on advice from our accountant and legal advice. Not sure if one way is really that much better or worse than the other, but I'd recommend one or the other simply to separate personal from business.

 

[iSign]

I am an LLC, operating as an S-Corp. which wasn't exactly on the poll, so I only mentioned S-Corp before.

 

[Pat Whatley]

S-Corp, for me. My accountants told me ten minutes into our first meeting to do it. They broke down the math for me and showed me how I was going to get hosed by the government doing it any other way (this is in my situation, I don't know about yours)

As far as LLC to protect your personal assets from your business all I've gotta ask is why?! They make insurance and accountants for that. What you'll pay for good insurance is a fraction of the tax savings you'll get. If you are sitting on enough personal assets to really need protection then your accountant needs to show you how to protect it.

And just from a personal standpoint I refuse to do business with anybody that sticks LLC on everything. To me it just says "I know I'm eventually gonna screw up so bad that somebody will sue the crap out of me and win so I'm gonna make sure they can't hold me personally responsible." Just my personal opinion but I can tell you in the last two months it's cost a garage door company, a tree cutting service, and a plumber a couple of thousand dollars each.

 

[Checkers]

S-Corp here too. It's a proven business structure with many years of rulings/opinions in the courts. LLC is relatively new and really hasn't been tested - yet.
Unless you're a large corp with many stockholders, a C-Corp is bad, you'll get taxed on your income twice. Partnerships are bad too.
As others mentioned, consult with your accountant and attorney.
If you haven't been to the SBA website yet, it'w worth the effort...
http://sba.gov/smallbusinessplanner/start/chooseastructure/index.html

Checkers

 

[binki]

... a C-Corp is bad, you'll get taxed on your income twice.

This only applies to dividend payments. Payroll is an expense to the corp and reduces income and thus income tax on the business.

I just saw this one and liked it. Cute, huh?

 

[vinylbarry]

Thanks for all that replied its a big step in our eyes and really want to do the right thing.

 

[Checkers]

This only applies to dividend payments. Payroll is an expense to the corp and reduces income and thus income tax on the business.

Don't forget that there can be 3 ways you reap the rewards of your business, reimbursed expenses, payroll and dividends.
If you're working with a good CPA, he'll be able to make the right recommendations on how to reduce your tax liability. For example, In a S-Corp, you draw a paycheck and you pay employment and income taxes. If you get a dividend check, you only pay income taxes. The S-corp doesn't pay tax on the dividend.
As a C-Corp, you'll still pay taxes on your pay. However, you and the corp pays taxes on the dividend.
Remember I'm not a CPA. So, consult with your CPA to insure that you reduce your tax liability as much as possible.

Checkers

 

[JimJenson]

SubS corp

 

[RJ California]

S-corp works well with us.