They both are separate legal entities that will take liability away from the business owner and place it on the new legal entity in the event of litigation. That being said, the choice of which business entity you should form for your particular business is a question best left to a discussion between you and your business attorney.
Limited liability companies serve over 75% of our clients the best, simply because there is a lot less paperwork on a yearly basis to deal with in the simple fact you can always convert a limited liability company to a corporation. If your company is never going to have over 50 employees or you’re never planning on going public with it or you don’t want to shop sell shares to different people for fundraising, a limited liability company will most likely be the best choice for you.
A corporation allows you to grow your company to any size, and have full control of it. One of the greatest features of a corporation is the ability to sell shares to investors, also known as stockholders. Corporations are more complicated because they have different requirements and filings with the Secretary of State’s office every year. Another important thing to consider is you can never go from a corporation and convert it back to a limited liability company, you can only go from a limited liability company to a corporation. There are also two forms of corporation there is the S corporation and the C corporation. An S corporation basically allows you to pass through taxation your tax return, meaning you could put your corporate taxes directly on your personal tax return. A C Corporation is what most people think of others Corporation, where they need to file a complete tax return just for the corporation itself. Corporations are also invaluable if you plan in the future on trading your company on the stock exchange or what is known is going public.
At the Botelho Law Group, we offer a free consultation to help you best determine what type of business entity you’d like to form, either a corporation or a limited liability company or a limited liability partnership. We offer for one low fee of $1500, which includes the $500 filing fee, all document preparation and filing with the Secretary of State in which you live to form your new business entity. On top of that you get one full free year of legal advice, any question you have pertaining to your company will be answered for you by an attorney free of charge for up to a year. The service alone is worth 10 times much the in the initial cost of setting up your company, and that benefit simply brings our law firm more future clients and is the reason we give such a tremendous benefit, for such a low amount.
Joseph F. Botelho, Esq.
BOTELHO LAW GROUP
Attorneys At Law
901 Eastern Ave.
Fall River, MA 02723