Incorporate

Why you might want to incorporate your business

The main reason why a person would want to incorporate their business is so that they can protect their personal assets. This country has become without a doubt a sue happy nation. So you want to make sure you can you differentiate your personal accounts and your business accounts.

So what are my options?

C-Corporation

This is double taxed; the corporation pays tax on its earnings and the shareholders pay taxes on those distributed earnings.


S-Corporation

This is somewhat the same as a Sole Proprietorship; however you are protected by the corporation. The net profits of your company are considered capital distributions and your profits are not taxed through the corporation, yet the flow through to your personal income tax return.

LLC

The Limited Liability Company is not a partnership or a corporation. An LLC is a distinct type of business that offers an alternative to partnerships and corporation, by combining the corporate advantages of limited liability with the partnership advantages of pass through taxation.