This option generally provides the same liability protection as a corporation but can have different tax consequences. It is often said that an LLC is more flexible than a corporation. While there is some truth to this statement, the flexibility is often minimal. Moreover, the tax liability can be more substantial than a sub chapter S corporation. It is important that you discuss your business needs with an attorney or accountant before you elect to become an LLC.
There is no best business entity for all situations, and there is no such thing as perfect protection. The best idea is to meet with an attorney and discuss your business situation. You can then weigh the initial expenses, long term costs and risks against your needs and make the best decision for you. As a final note, remember that you can lose your protection under certain circumstance. The right business entity, a good lawyer and good accountant can help you avoid problems before they occur.
For a detailed discussion on business formation including, personal liability protection, flexibility of entities, formal requirements and basic tax considerations, please contact our office to schedule an appointment.