Business Lessons #1:
5 Benefits of a Corporation or LLC
By Lisa Wills, Law Offices of Lisa D. Wills
Top 5 Benefits:
- Asset Protection
- Tax Considerations and Benefits
- Credibility to Customers and Clients
- Protect your Business Name
- Perpetual Existence
The details:
1. Personal Asset Protection
No one goes into business thinking that they will get sued. Unfortunately it can happen. What if a client sued you and won? The client could enforce the judgment against your personal assets. Owners can limit personal liability by operating their businesses as a corporation or LLC.
2. Tax Considerations
Profit and loss typically pass through an LLC and get reported on the owner’s personal income tax returns. An LLC can elect to be taxed as a corporation. A corporation can avoid double taxation of corporate profits and dividends by electing Subchapter S tax status. Corporations and LLCs can typically deduct normal business expenses before income is allocated to owners. Talk to your tax adviser for more detailed tax information.
3. Credibility
Businesses with an “Inc.” or “LLC” in their business name appear more reputable. Customers, vendors and others may prefer doing business with a corporation or an LLC.
4. The Business Name
A corporation or LLC can reserve its name. This can help market your business by specific name recognition and branding and avoids confusion with other companies.
5. Perpetual Existence
Corporations and LLCs can continue to exist after owners sell their interests, retire or die.
For more information about business advice, call us at (925) 463-9000 or send an email.
Lisa Wills of the Law Offices of Lisa D. Wills is a skilled business law attorney in Pleasanton, CA helping educate businesses to protect their hard work and to keep on doing business. If you have questions concerning your business, contact Lisa Wills at by email or at (925) 463-9000.
