My friend and I are in the business of creating websites, marketing them, and sometimes selling them. Now I think we should have a company name. Just so we look more professional and I've heard its better for legal reasons. But my question is, which type should we be? Is it better to be a LLC, INC, Company, or what. I've tried looking the differences up but they all seem to have benefits. But basically we dont do anything fancy. We just create, buy, sell, market, and collect ad money from websites.
I've read of LLCs being the best and know many people have chosen that type for their online business.
Perhaps this will be of help.... A Limited Liability Company (LLC) is often described as the combination of a partnership and a corporation. This is because an LLC combines the tax advantages and management flexibility of a partnership with the liability protection of a corporation. Forming an LLC has become a popular alternative for sole proprietors and partnerships that have thought about forming a corporation in order to protect personal assets. LLCs also avoid "double taxation" because the income of the LLC itself is not taxed at the company level. Instead, taxes on profits and deductions of losses are computed at the individual level on the personal tax return of each LLC member (owner). Advantages of an LLC Limited Liability. Like the shareholders of a corporation, the owners (called 'members') of an LLC have limited liability for business debts. If the LLC is properly structured and managed, each owner's personal assets will be protected from lawsuits and judgments against the business, so each owner's liability is limited to the amount each has invested in the company. Pass-Through Taxation. If an LLC has only one owner, the Internal Revenue Service will automatically treat the LLC as a sole proprietor. Similarly, an LLC with multiple owners will, by default, be taxed as a partnership. Owners report their share of the profits and losses of the LLC on their personal tax returns, and no separate tax is assessed on the company itself. Citizenship. All owners of a Subchapter S Corporation ('S Corp') are required to be citizens or permanent residents of the United States. There is no such requirement for a general, or 'C,' corporation or for an LLC. Management Flexibility. LLCs have much more management flexibility than corporations. Also, an LLC may be managed either directly by its owners or by a manager who may be one of the members or may be hired to run the business. Although an S corporation is limited to 100 owners, an LLC may have an unlimited number of owners. Simple Recordkeeping. Unlike corporations, LLCs are not required to hold an annual meeting and draft meeting minutes. Note, however, that an LLC does need an operating agreement that will specify how and by whom the company will be managed, each owner's name, the amount of ownership interest held by each owner, and many other items. LLC.com can assist customers in writing up their operating agreements. Deductible Expenses. Similar to a corporation, normal business expenses like an owner's salary may be deducted from the profits of an LLC before the LLC's income is allocated to its owners for tax purposes. Flexible Profit & Loss Allocations. Unlike a corporation, an LLC is not required to allocate profits and losses in proportion to ownership interest ("member interest'). This means that the owners of an LLC can agree to allocate the company's profits and losses among themselves however they see fit and not necessarily based on the percentage of the company each owner controls. Nationally Recognized. The LLC is now a recognized business structure in all 50 states and the District of Columbia. Jim
It all depends on what you are looking for in a company formation. I was just answering your question about the advantages of an LLC. When I was ready to legally form my company, the LLC seemed to be the best for me....but, from what you descibed in your first post, it seems it would fit you as well. Jim
it also depends which country are you in currently.. laws are differnet for each country likewise..i think LLC are the best bet for you