For many business owners, the decision between incorporating your business as a corporation vs LLC (limited liability corporation) may be a difficult one. Developing a laundry list of pros and cons may be helpful in clarifying which incorporation type will best benefit you. Remember that the decision you make may have different ramifications in the future.
Is forming a corporation the smart choice for you?
For some business owners forming a corporation vs LLC can be the better decision. Corporations are a separate legal entity owned by shareholders. For this reason, shareholders cannot be held personally responsible for the debts of the corporation. Your personal liability is typically limited to the amount you invested in the company. The worst fears of an investor is to risk losing more than he or she invests in the company. This can be a wise choice when trying to minimize your exposure.
Another reason you may wish to form a corporation vs LLC, is that your business can have many investors. This will allow you the ability to raise money from the public. Having an LLC can beneficial if you are not going to have many investors. In some cases, the investors are the ones who can get a company up and running and keep it going. If you form an LLC, this is not a viable option.
Lastly, if you form a corporation vs LLC your business might be able to bring in new employees by offering stock options. If you form an LLC you would not be able to do this, as they do not have stocks. With an LLC, employees can be offered membership interests. This is not the same as being offered stock in the company and can also be an awkward process to complete.
Corporation vs LLC which is right for you?
So, if you are thinking about forming your business as a corporation vs LLC, therefore you may want to consider using an incorporation services provider. Using a company that specializes in incorporation services can provide you with peace of mind. Since you know that they are experts in the ins and outs of incorporation. To find out more about the benefits of using an incorporation service provider read How to Incorporate.
