The Difference between LLCs, S Corps, and C Corps


Presentation Description

If you make the decision to form an LLC or Corporation, an experienced business law attorney in Santa Monica or Los Angeles can help you with the process and answer any questions you may have.


Presentation Transcript

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The Difference between LLCs S Corps and C Corps Shortly after making the decision to start a new business venture you need to determine the structure of the organization that will suit you the best. You will have a few options:  A Sole Proprietorship  A Partnership  A Limited Liability Company or LLC  A Corporation If you make the decision to form an LLC or Corporation an experienced Los Angeles business attorney can help you with the process and answer any questions you may have. The Advantages and Disadvantages of the Various Business Structures It is important to keep in mind that the business structure you choose will have an impact on the amount of taxes you pay your ability to raise revenue and your legal responsibility if your organization is sued. Consider the advantages and disadvantages of each. With a sole proprietorship the typical setup for the single business owner requires minimal paperwork. The owner has complete control of the organization. However the primary disadvantage is that there is no separation between personal and business liability. Also this type of business structure makes it more difficult to raise money from potential investors. A general partnership also requires minimal paperwork and is the default configuration for businesses with multiple owners. The division of ownership is at the discretion of the owners. Like the sole proprietorship profits are claimed on the tax return of the individual owners. An enormous downside to a general partnership is that there is not a separation between the liabilities of the business and the owners. There is the chance the vision of the partners may not align as the business grows which can lead to conflict. This is also a poor business structure for raising capital from investors.

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This disadvantage can be circumvented by forming a limited partnership but in this type of structure the owners have restricted control in the management of the company. Hire an Experienced Business Lawyer in Los Angeles At Verhagen Bennett we represent our clients in a wide range of matters from the initial startup through the growth of the business. We offer practical guidance and advice that helps our clients make the essential business decisions that will lead to their company’s success. If you would like knowledgeable legal counsel to represent you or assistance with business legal matters schedule an appointment to learn how we can help you.

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