Forming Corporations and Limited Liability Companies (LLCs)
When starting a business, it is important to select the best type of business entity. The right choice can provide liability protection, tax advantages, and management advantages. Today, most of our clients select the limited liability company as their business entity, but this is not necessarily the best choice for everyone.
The limited liability company (also referred to as an “LLC” or an “LC”) and the corporation both provide “limited liability,” meaning that the owners of the business are not personally liable for the debts and obligations of the business. While this does not protect the owner from liability arising out of his or her own actions (if you drive a car and have an accident, you may be personally liable even if you were driving on business for your company), it can be extremely important when the business has employees. We generally recommend that our clients form some sort of limited liability entity to operate their businesses.
However, the choice between a corporation and an LLC can be difficult. The limited liability is the same for both but there are differences in how the entities are taxed and how they are run. At Rice & Stallknecht, P.C. we are experienced in working through the differences, often with the client’s accountant, to make the best choice.