Lofty Matters

If you are in the position of starting a small business, something that should be seriously considered is incorporating your new company. This is not the major expense that many people think it is. In fact, it costs much less than people expect. You don’t need a lawyer and this can provide many benefits for the small business owner like lowered personal liability and favorable tax benefits.

Why would a small business owner want to incorporate their new business? Incorporating is a good idea because it not only limits your potential loss to whatever you have invested in the business but it also presents a professional and credible image to potential customers and clients.

Another thing many small business owners wonder about is which is a better choice for them…LLC or S Corporation and what is the difference between these two entities. The answer is that this depends on your particular situation and the best course of action is to discuss your situation with a tax professional. LLC vs. SCorporation is an important decision and should be made carefully. LLCs require less paperwork and are more flexible in in the way that owners divide their profits. S Corporations allow owners to save on employment taxes, however. LLCs are more simple to operate because they are not subject to the same formalities that S Corporations must follow.

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