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  • To Incorporate or LLC

    First off, I'm in Washington in the US. I know these things affect the choice.

    Now.. My question is for libability and profits, which is the best choice? Which offers the best libility and tax structure? I would be the only one the owns the company, and I would want to open a bank account. I assume both would offer me that choice. For an LLC or S-Corp/C-Corp what are the legal requirements to send back to the State? What is the different between S-Corp and C-Corp for a forum?
    Running vB since 4-14-2002

  • #2
    S-corp- you're limited to number of shareholders and the business income flows through your personal income for tax purposes.
    C-corp- more flexibility on size and number of shareholders and profits are distributed through divedends which are taxed as capital gains (after corporate profits are taxed)

    I think S-corp does reduce your tax burden.
    MCSE, MVP, CCIE
    Microsoft Beta Team

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    • #3
      Thanks for the information, which is best for a forum. LLC, S-Corp or C-Corp? I run an Adult forum, so I need the liability.
      Running vB since 4-14-2002

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      • #4
        These links should help:

        http://www.corporate.com/shouldIIncorporate.jsp
        http://www.corporate.com/llc-vs-s-corporation.jsp
        http://www.corporate.com/entity-comparison.jsp

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        • #5
          FYI, I went through the same ddecision process and went with S-Corp based on my accountant's recommendations.
          Steve Machol, former vBulletin Customer Support Manager (and NOT retired!)
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          Mankind is the only creature smart enough to know its own history, and dumb enough to ignore it.


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          • #6
            Thanks Chris for those links.

            Why did he say S-Corp Steve? I'm sure it is different in your state though.
            Last edited by IDN; Tue 11th Apr '06, 11:28am.
            Running vB since 4-14-2002

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            • #7
              I forget all the reasons but basically is was for taxes.
              Steve Machol, former vBulletin Customer Support Manager (and NOT retired!)
              Change CKEditor Colors to Match Style (for 4.1.4 and above)

              Steve Machol Photography


              Mankind is the only creature smart enough to know its own history, and dumb enough to ignore it.


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              • #8
                Looking at some of the sheets it seems an LLC is the best way to go for a small business.
                Running vB since 4-14-2002

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                • #9
                  Unless you have a particular reason why you want to become an LLC or Incorporate, it's better not to do so. LLCs can get messy, especially when it comes around to tax time.
                  ManagerJosh, Owner of 4 XenForo Licenses, 1 vBulletin Legacy License, 1 Internet Brands Suite License
                  Director, WorldSims.org | Gaming Hosting Administrator, SimGames.net, Urban Online Entertainment

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                  • #10
                    I also went with LLC. The main reason is that I can pass the profit through as personal income at the end of the year, basically you're taxed once. It's beneficial if your business makes a lot of profit. With either form of corporation, I believe that you're taxed at the corporate level, then again propotionally when you take out the profit. The down side of LLC is that you can't issue stock, so raising money is limited to private investments. I believe that's how my wife explained it to me since she does the accounting stuff We filed our tax for this year already, nothing too major.
                    Last edited by Vtec44; Tue 11th Apr '06, 5:08pm.
                    So Cal Sportbike forum - So Cal Moto - Kawasaki Ninja 250R Forum - Custom vinyl decals - Southern California camping forum

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                    • #11
                      Originally posted by ManagerJosh
                      Unless you have a particular reason why you want to become an LLC or Incorporate, it's better not to do so. LLCs can get messy, especially when it comes around to tax time.
                      A lot of people do it mostly for the protection of liabilities.
                      So Cal Sportbike forum - So Cal Moto - Kawasaki Ninja 250R Forum - Custom vinyl decals - Southern California camping forum

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                      • #12
                        Originally posted by Vtec44
                        A lot of people do it mostly for the protection of liabilities.
                        And protection of personal assets. If something goes wrong and/or you get sued, you don't want to lose your house.
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                        • #13
                          Originally posted by ManagerJosh
                          Unless you have a particular reason why you want to become an LLC or Incorporate, it's better not to do so. LLCs can get messy, especially when it comes around to tax time.
                          If he is worried about liabilities, using a LLC is a lot better solution than being a sole propietor. You can file under personal income, but dont have the threat of loosing your house, your car, your dog, or your bank account.
                          Trent Gillespie Mod Theater Gillespie Photography

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                          • #14
                            Originally posted by tgillespie
                            You can file under personal income, but dont have the threat of loosing your house, your car, your dog, or your bank account.
                            That is just wrong
                            So Cal Sportbike forum - So Cal Moto - Kawasaki Ninja 250R Forum - Custom vinyl decals - Southern California camping forum

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                            • #15
                              Originally posted by Vtec44
                              With either form of corporation, I believe that you're taxed at the corporate level
                              I believe S-Corp is like a LLC, a limited form an Incorporation. I'm just not sure about having to send in minutes, etc. How's the tax filing and business filings on an LLC for you? What are you required to do at the end of the year?

                              I don't see the major difference of why a Corporation is any better then an LLC. It seems a Corporation is more fuss just to have stock. I won't be selling stock for my website.
                              Running vB since 4-14-2002

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