Corporation or LLC
Why Form a Business Entity
Most, if not all entrepreneurs start a business for one simple reason… to make a profit. As your business becomes successful, those profits transform into personal assets and wealth. One of the main reasons for you to form a Corporation or LLC is to protect your personal assets by separating them from your business liabilities.
Separate your assets from your liabilities with a Corporation or LLC
Asset Protection – Forming a C Corp, S Corp or LLC creates a legal separation between you and your business. You work hard to make a living. The last thing you want is to lose your home, your car or child’s college fund due to a business liability such as a creditor or lawsuit. Without forming a business entity, you are operating as a sole proprietor or perhaps a partnership. Either way, you are personally responsible for any liabilities you or your partners create. An LLC or Corporation is treated as an individual by the courts. Therefore, the liabilities fall to the business entity, not you.
Asset protection is not the only reason to operate your business through a Corporation or LLC; there are numerous other benefits as well, including:
Personal Privacy – Identity Theft –The “Digital Age” is creating access to your personal information at an alarming rate. As the owner of a C Corp, S Corp or LLC, you have options that enable your personal, private information to be secure from prying eyes. CenterPoint Corporate Services can provide you with managers, officers and directors whose names become the only ones available through a public records search. This provides you with an additional layer of privacy protection.
Tax Planning* –Doing business as a C Corp, S Corp or an LLC may give you tax benefits that are not available to an individual. You may also have choices as to how your company is taxed. Business expenses like travel and entertainment, insurance, and operating costs can be tax deductable.
Marketability –A company’s image and credibility is increased when it is incorporated or organized as an LLC. “Your Company, Inc.” or “Your Company, LLC” conveys a level of professionalism to the public and creates a level of confidence for your customers and vendors.
Business Flexibility –Whether you are just starting your business or are growing with an infusion of capital, you can create a business entity that will give you the flexibility you need to manage your company in any way you wish.
Raising Business Capital –If your business is going to need outside investment for start-up or expansion, a Corporation or an LLC gives you the flexibility to raise the capital you need.
Continuity –A business has a life of its own. An LLC or Corporation can continue long after you retire. A Sole Proprietorship or Partnership does not.
Fringe Benefits** –Enjoy the benefits of Fortune 500 companies: Retirement planning, deferred compensation, annuities, life insurance, and medical reimbursement plans are just a few of the possible benefits of doing business through a C Corp, S Corp or an LLC.
* Always consult a tax advisor before implementing any tax strategy.
** Your accountant or financial advisor can guide you as to which fringe benefits are best for you and your company.