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LLC or Incorporate a Business

29 March 2018 No Comment

There are several types of business formations to choose from when you start your company, but many people choose to start a limited liability corporation or a corporation. Each entity has its own benefits.

What Are the Benefits of an LLC?

Limited liability corporations, which are more often known as LLCs, have several big benefits. Perhaps most importantly, they protect the business owner or owners from personal liability if the company needs to file for bankruptcy or has other financial problems. This means the company must pay its own debts. While you can lose any money you personally invested in your company, your personal assets cannot be seized to pay business debts. This means that your home, bank account and other personal property are safer. LLCs also mean less paperwork, more flexibility and more tax advantages, such as being able to adopt the tax status of partnerships, S or C corporations or sole proprietorships.

What Are the Benefits of a Corporation?

Corporations also protect your personal assets but have several other benefits as well. A corporation often has an easier time gaining the capital it needs to run successfully, and corporations are often viewed as more credible businesses. If you incorporate your business, it has perpetual existence, which means it can continue operations even if you leave the business. Finally, incorporating your business provides you with anonymity so that your personal name is not involved with the company.

What About Employer Identification Numbers?

Regardless of which type of corporation you decide on, you’ll need a federal tax ID number, which you can apply for on the IRS-EIN-Tax-ID website. The application, which is available 24 hours a day, takes just a few moments to fill out. The response is just as quick. If you submit your application during business hours, you will probably receive your EIN the same day.

Learn more about how an EIN benefits you or why you need a tax ID number for an estate. Contact IRS EIN Tax ID Filing Service for information.

 

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