Should I file an LLC or a corporation?
This question is tricky. In general, LLCs work best for smaller companies as LLC’s allow for slightly more flexibility and less rigid corporate structures. Corporations work best for larger companies that plan to use a larger structure including investors, stockholders, and employees. It should be noted that this is a general overview of LLC’s and Corporations. There are a number of factors (including tax considerations) that must be considered when forming a legal entity. For a more detailed explanation and an analysis of your business needs please contact us.
Why should I form a corporate entity?
If set up and maintained correctly, corporate entities create protection for their owners, members, and shareholders. Corporate entities provide this protection in the form of limited liability. This means that (if the entity is set up and maintained correctly), the owners of the entity (members or shareholders) are not personally liable for the debts and liabilities of the business. The owners of the entity are only liable to the extent of their investment into the company, their separate personal assets are generally not accessible by creditors.
Another reason that corporate entities are beneficial is that they allow for the selling of shares. This is a method that can be used to attract investors and build capital without taking on loans.
There are many factors that must be considered when deciding whether to form a corporate entity. There are also tax implication and procedural steps that must be accounted for. If you are considering forming a corporate entity and would like advice tailored to your business, please contact us.
What is a registered agent?
When forming a legal entity (such as a corporation or LLC) the entity needs to submit the name of their registered agent to the Secretary of State for the state that the entity will be incorporated under. A registered agent is the designated person who is responsible for receiving important documents on behalf of the business, such as litigation related documents, government related documents and compliance related documents.