Incorporating or Forming an LLC is a great first
step in starting your business. Below well discuss
some of the advantages of the corporation and
The corporation is the most enduring form of business
entity. Originally created hundreds of years ago as
a way to protect shareholders in risky overseas
ventures, corporations today are now formed by filing
the necessary documents and fees with the Secretary
of State. This creates a distinct legal entity that
is separate from the shareholders.
Its akin to creating a new "person" with
its own name and social security number (called the
FEIN or Federal Tax ID Number; which we can obtain for
Many people choose to incorporate to:
This means that although you may have poor personal
credit, you can structure your new business in
a manner that allows you to build a pristine credit
profile for your company, allowing you to receive loans,
credit cards, lines of credit, etc. that you would not
be able to obtain as an individual (and often at better
just some of the many reasons why the corporation
is the entity of choice for not only the largest companies
on the planet, but some of the most successful small
businesses in the world.
Corporations are also easily modified as your company
grows or changes. Once the corporation is formed, you
can "amend" the Articles of Incorporation
to change the name, the directors, the amount of shares
authorized, etc. Many corporations like Dell and
EarthLink started out as very simple corporations which
were modified as the company grew and became more complex.
Although it sounds like a complex decision, a corporation
can also be dissolved almost as easily as it is created
(assuming there is no outstanding debt) by filing dissolution
papers with the State, returning any money to the shareholders
and notifying the IRS.
The LLC is a relatively new form of business entity
(originally created in Wyoming in the 1970s)
is now recognized in all 50 States and D. C. It
provides many of the benefits of a corporation (limited
liability, separate entity, etc.), without the extra
work of issuing/tracking stock, holding formal
board and shareholder meetings and writing numerous
resolutions and minutes.
Many people choose to form an LLC to:
Because of their easy management and taxation structure,
LLCs have quickly surpassed Corporations as the business
entity of choice for many small business startups.