I was informed that I would need to incorporate with an LLC or a C or S corp? What does that mean?
I am a 60 year old female, and I have a small boutique (selling clothes, shoes, etc) that I operate out of my home. I know that you will probably disagree with me, but many times I find myself giving things away. When I see a child waiting in the cold without a jacket or sweater to catch the bus, and the parent tell me that they cannot afford a sweater, I will give it to them. This is not that I have much. I am unemployed and also poor. My business is slow because I am trying to get stuff to sell. Recently, I tried to join a home based business online, but they informed me that I . Please tell me in detail what this mean, and how do I go about doing this.
- Anonymous9 years agoFavorite Answer
I assume that you are now running your business as a sole proprietor.
If you will incorporate an LLC or a C or S corp. You will be owner of a company or in case of an LLC you will be Limited Liability Company member.
Incorporating an LLC or a C or S corp. have a lot of benefits comparing with sole proprietor. Starting with limited personal liability protection.
You are probably wondering which one should I incorporate LLC or a C or S corp. There are a lot of differences, however you should firstly decide how would you like to be taxed, as a corporation or you prefer Pass-Through Taxation!
Limited Liability Company is automatically recognized by IRS as a “pass-through” tax entity, like partnership and sole proprietorships. These means that all Limited Liability Company profits and losses “pass through” entity and are taxed on members individual tax returns. But you can elect to be taxed as a taxed as an C corporation.
C corporation: profits and losses of a corporation are reported on a corporation tax return, at a specific corporate tax rates.
S corporation: is also treated as a “pass through” entity.
Ok , so my advice is that you firstly decide how would you like your business to be taxed.
I also advise you to form an LLC, on link provided below you will find pretty much all you need to know about it!Source(s): http://www.limited-liability-company.biz/
- Go with the flowLv 79 years ago
They are trying to scam you into something you absolutely do not need
Yes, it's really that simple