How You Can Benefit from a Corporation or LLC.

Regardless of their size, all businesses can benefit from incorporating. Advantages of forming a corporation or Limited Liability Company (LLC) include:

• Personal asset protection. Both corporations and LLCs allow owners to separate and protect their personal assets. In a properly structured and managed company, owners should have limited liability for business debts and obligations.
• Additional credibility. Adding "Inc." or "LLC" after your business name can add instant authority. Consumers, vendors, and partners may prefer to do business with an incorporated company.
• Name protection. In most states, other businesses may not file your exact corporate or LLC name in the same state.

• Perpetual existence. Corporations and LLCs continue to exist, even if ownership or management changes. Sole proprietorships and partnerships just end if an owner dies or leaves the business.
• Tax flexibility. Though profit and loss typically pass through an LLC and get reported on the personal income tax returns of owners, an LLC can also elect to be taxed as a corporation. Likewise, a corporation can avoid double taxation of corporate profits and dividends by electing Subchapter S tax status.
• Deductible expenses. Both corporations and LLCs may deduct normal business expenses, like salaries, before they allocate income to owners.

Incorporate or Form an LLC?

Corporations and LLCs are both separate legal entities (business structures) that enjoy certain protections under the law and important benefits. Most people form a legal business structure to safeguard their personal assets. Incorporating, or forming a Limited Liability Company (LLC), allows you to conduct your business without worrying that you might lose your home, car, or personal savings because of a business liability.

Business Comparison Chart

	C Corporation	Subchapter S Corporation	Limited Liability Company	General Partnership	Sole Proprietor
Owners have limited liability for business debts and obligations	X	X	X
Created by a state-level registration that usually protects the company name	X	X	X
Business duration can be perpetual	X	X	X
May have an unlimited number of owners	X		X	X
Owners need not be U.S. citizens or residents	X		X	X	X
May be owned by another business, rather than individuals	X		X
May issue shares of stock to attract investors	X	X
Owners can report business profit and loss on their personal tax returns		X	X	X	X
Owners can split profit and loss with the business for a lower overall tax rate	X
Permitted to distribute special allocations, under certain guidelines			X	X
Not required to hold annual meetings or record meeting minutes			X	X	X

Corporations and LLCs are both excellent choices for business owners looking to minimize their personal liability and build greater credibility. But each entity also offers distinct tax and business advantages. Choosing the right one depends on the specific needs of your business.

Corporations offer personal liability protection, tax savings, and increased opportunities for raising capital. Corporations are also required to perform certain formalities such as holding annual meetings and keeping detailed corporate records (minutes). With Blackwell Capital & Advisory you can choose to incorporate as either a C or S corporation.

Limited Liability Companies (LLCs) offer the same personal liability protection as a corporation, but with fewer of the corporate formalities. They typically are not required to hold formal meetings or keep detailed corporate minutes. LLCs also offer great tax flexibility. Members can choose to be taxed as either a traditional corporation or as a "pass-through" entity.