We were thinking of incorporating our business to become a Limited Liabilities Corporation (LLC). I have done a little research and really like the tax breaks we can get and the fact that if anything (hopefully it doesn't) happens with client relations then our business, not us, personally are not responsible.

What are all your thoughts? Anybody else incorporated? Was it an easy or a long process? And what about TAXES?

Chris, did you read through this thread, dont know if it has anything to do with your questions or not.

Chris!

Hey buddy. I'm an LLC... and I hear it's worth it. But I only hear because I haven't finished a year in it yet! I'll let you know once I file this year. Oh, and I since I've only shot for a year, I have nothing to compare it to previously. Does that help you? Seriously though, I do know it's always nice to be protected. Liana may be a great person to ask - but I know she's at Imaging USA in San Antonio. It ends on Wednesday so maybe you can hit her up after!

Or read the post Mike linked to. But I don't know for myself either since I didn't click on it.

Chris,

We are incorporated as an LLC.
I would highly recommend incorporating, but would also highly recommend speaking directly with a good accountant about how to proceed. We have a great local accountant that you could speak with. PM me for info!

thanks guys for all the help. Mike thanks for the link I am defiantly going to read through it tonight. Nam, keep me posted on how everything files. Rachel, Katie and I are meeting with an accountant when we file this year, that used to be a former IRS auditor. So we will see what happens. You know, it doesn't hurt to have too many contacts though, I'll keep your accountant in mind.

You guys are AWESOME!

between our CPA and Lawyer we decided to become and S-Corp LLC. I am still confused about a lot of it but that is what theyare a for....It is a bit more complicated but I think it is a good move...

I might also recommend taking a gander at a book called The Entrepreneur's Guide to Business Law. It has a chapter on the formation of the business, and a handy little chart that breaks down some of the differences - it's also pretty accessible in that it doesn't completely talk in legalese - a lot of the book may not be applicable, but I thought that section was a good intro to some of the differences.

I haven't finished my research on the options available in Georgia, but we'll most likely be going to LLC route. Limited liability (although, technically, I believe you can still be liable for your own actions in the course of business, so it's not a 100% shield), and pass-through taxation (meaning if we lose money the first couple of years, we take that on our personal taxes instead of having to wait until there are gains in the business to be able to put against the losses).

Great words as always, Kaitlin. We are an LLC as well...also make sure your contract includes and matches your LLC description so your business can be covered for any liability...we've been there. We are in the middle of redoing our contract now.

At least in our state (IL), it's much more expensive to file and maintain an LLC than an S-Corp, and the S-Corp also has the benefit of pass-through income but it offers the same protection as a C-Corp. In IL the cost of filing for an LLC is something like $700 and for an S-Corp it's around $300. I talked to an attourney and if I enlist him to do all the legal paperwork for incorporation, he charges me $850 for an S-Corp, and about $1250 for an LLC. I think some of the benefits of the LLC are that you are not required to hold annual officers meetings and keep minutes. But that is not that hard to do anyway. You are also free to have as many owners as you wish, which for an S-Corp there is a limit of 75 share holders I think. In my sate, from my perspective, the S-Corp is a better entity because when comparing all the details, it comes down to which is less expensive to create and maintain.

My $.02

Joy, exactly what did you mean by match LLC description to the contract?

If your contract doesn't specify your liabilities or set up, people may be misled and think that you are a sole proprietor, corporation, etc. The legalities could be thrown aside if you're presenting yourself to your clients as something different; technically if you're a corp or LLC, you are acting as an agent of the company, not in your personal capacity... Besides, you want to be clear about liability and so forth in your contract anyway - it's an added layer of protection for you.

Ramero,

Glad I saw this post. I had to set up a new, seperate corporation, I am in Chicago. I just got back from the govt' office - cost for a ( INC) is $175 - total $275 of next day. 12th floor of 69 W. Washington. (no line, takes about 7 minutes) Yes, an LLC is a lot more to start. As for the officer meetings, I like to hold them somewhere warm and sunny! I like the S-corp route.



Good information.


Patrick