LLC Registration or Corporate Registration: Which is Best?

business were in operation throughout the United States in 2007 according to the Small Business Administration. Six million companies had employees and 20 million companies did not according to 2005 census data. The small business administration calculates that over 99% of the businesses in existence in the US employ less than 500 workers each.

For many, the journey sets out as a small startup. According to statistics provided by the small business administration, approximately 80% of all small business startups were financed by either loans or savings from family or acquaintances. Therefore, as these businesses begin to mature and flourish, it is imperative that more financial support becomes available from banks and public sector insitutions. The more growth the firm experiences the more the original founders commence to look for prudent ways to decrease their personal liabilities and risk in the business..

Developing a checklist before starting a business is usually a positive first step and it should look something like this: choose a tax year (fiscal year), determine on an appropriate business structure and pick out an accounting method that works for your particular industry. The need for incorporation arises if the business structure chosen is either a LLC or corporation. Mandatory paperwork filing comes with choosing either of these corporate structures. If you select to structure your business as a sole propietorship or partnership, registration may not be necessary and business activites could start out immediately. If you pick out to take a more corporate route in the structure of your business, be prepared for a lot of mandatory legal requirements and compliance issues to be understood and addressed.

To incorporate your business you will need to fill out the proper forms and submit them to the proper agencies in the state the incorporation is performed. To help facilitate the process of incorporation many business owners would be wise to employ the counsel of an incorporating agency. The primary reason why business owners would pick out to employ an incorporating agency is because of the efficency they can provide in preparing and filing the unavoidable paperwork. Many small business owners choose to incorporate their company in Nevada or Delaware, simply because these states are considered by many to be “corporate friendly”.

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LLC vs Incorporation
Incorporating a Business