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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. |
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Additional Reputation
and Credibility. Adding "Inc." or "LLC" after your
business name can add instant authority. You may lose business
from customers, partners or vendors if you are not incorporated. |
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Name protection.
In most states, other businesses may not file your exact corporate
or LLC name in the same state. This can give you an exclusive
name of doing business within your state. |
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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 |
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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. |
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Deductible expenses.
Both corporations and LLCs may deduct normal business expenses,
like salaries, before they allocate income to owners. |
