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Choosing between incorporating a business as an S corp or an LLC can be tricky. Both companies have their similarities - and differences - which can often make deciding between the two a difficult task. And when each state's rules and regulations come into play, it only adds to the confusion.
Structuring a small business as an LLC or an S corp allows a business owner to protect his or heir personal assets from a business creditor.
"Limited liability means you can't be financially responsible for more than your investment in the company," writes Greg McFarlane in his book, Control Your Cash: Making Money Make Sense, Inc. magazine reported.
"If you put in $10,000, and incur $11,000 in debt, you're only potentially liable for $10,000. Your creditors (check that, your LLC's creditors) can't 'pierce the corporate veil,' as the phrase goes," he added.
An LLC and S corp both help a person avoid paying personal and corporate taxes. The difference in an S corp, however, is that owners pay themselves a salary and receive dividends and additional profits. An LLC, however, is a "pass-through entity," meaning that all income and expenses are reported on the LLC operator's personal income tax return.
This article is brought to you by Vcorp Services – Vcorp offers executives, attorneys, accountants, and entrepreneurs an extensive suite of services including entity formations, state filings, document retrieval, tax-exempt filings, UCC filings and searches, 501c3 filings and more. www.vcorpservices.com
Structuring a small business as an LLC or an S corp allows a business owner to protect his or heir personal assets from a business creditor.
"Limited liability means you can't be financially responsible for more than your investment in the company," writes Greg McFarlane in his book, Control Your Cash: Making Money Make Sense, Inc. magazine reported.
"If you put in $10,000, and incur $11,000 in debt, you're only potentially liable for $10,000. Your creditors (check that, your LLC's creditors) can't 'pierce the corporate veil,' as the phrase goes," he added.
An LLC and S corp both help a person avoid paying personal and corporate taxes. The difference in an S corp, however, is that owners pay themselves a salary and receive dividends and additional profits. An LLC, however, is a "pass-through entity," meaning that all income and expenses are reported on the LLC operator's personal income tax return.
This article is brought to you by Vcorp Services – Vcorp offers executives, attorneys, accountants, and entrepreneurs an extensive suite of services including entity formations, state filings, document retrieval, tax-exempt filings, UCC filings and searches, 501c3 filings and more. www.vcorpservices.com
About Vcorp Services LLC
Vcorp Services assists in the creation of new businesses and helps maintain existing businesses in
all 50 states. Quick, accurate and at the lowest rates, Vcorp's knowledgeable and experienced staff
has helped form thousands of new businesses including: LLCs, S-Corporations, C-Corporations,
Partnerships, Non-Profits and Professional Corporations. Vcorp works with entrepreneurs, legal and
tax professionals, as well as real estate experts to set up and maintain businesses across the
country. Vcorp also specializes in helping small businesses to get started, grow and remain in
compliance with federal and state regulations.