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Which is safer, Corp or LLC?

Asked by: adam  — 5 October, 2011

Which is safer for me a corp or LLC?

Answered by: admin  — 5 October, 2011


Depending on the state, there may be a small regulation here or there that would make one “safer” than another (for which asking a corporate attorney is never a bad idea). Typically, however, both entities offer very similar protection of separating your assets from your company’s liabilities.

In many cases, it really depends on the size and ambitions of the company itself that play into the factor of deciding which entity type is best suited for you and your goals. For example, if you are a single-owner, or part of a small two or three member partnership, then an LLC may be more practical for structural and tax purposes.

Standard C-Corporations are usually best suited for larger groups of owners, who want a company that will be able to issue stock, have investors and shareholders along with a board of directors. Corporations will require more maintenance as well, such as recording annual meeting minutes and adopting corporate by-laws.

Once in a while, for tax or regulations per the state you are registering in, it may be sensible to form an S-Corp. This is a tax structure that allows a corporation to be taxed similar to the way an LLC is taxed (passing the profits or losses to the owners). S-Corps do have their own benefits and disadvantages, which you can read about by clicking here). Remember, having an accountant is never a bad idea.

I hope you were able to find this answer helpful.

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