Home > How To Form > What Is The Best Entity Type For My Situation? LLC, S Corporation, C Corporation
How do I determine the best entity type for my situation?
LLC, S Corp, C Corp, LLP, DBA, there are so many different entities out there, how do you choose what is best for you?
In this audio snippet, you'll hear about:
- Couple of factors to consider when deciding between LLC, S Corp, C Corp, and others
- What are you looking to gain?
- Discussion of liability protection
- Recommend that you talk to your accountant
Audio Transcript
Travis:
All right. First I'm going to ask you a few questions just in general,
about corporate entities in general. Then we'll move to a few specific
LLC questions, and from there we'll move to a few specific S–Corp
questions.
To
get us kicked off here, my first question is: How do I determine what
is the best entity type for my situation? LLC, S–Corp, C–Corp, LLP, DBA
–– there's so many different entities out there. How do you choose
what's best for you?
Jake:
That's a very good question. We definitely have a lot of people that
ask that question. There are a couple factors that people really need
to consider. The first question is: Why are you looking to form this
entity? What are you looking to gain out of it? Are you looking for
personal liability protection? Are you looking for tax advantages? Are
you looking for simplicity? What is it that you're looking for?
Now,
when it comes to liability protection, obviously entities such as an
LLC, an S–Corporation, C–Corporation, and the Limited Partnership ––
you know, limited partners have limited liability protection –– the
Limited Liability Limited Partnerships where all partners have
liability protection. So there are some questions there that you have
to ask and say, "OK, am I looking for liability protection?" If you
are, then it's going to be one of those entities.
Travis:
One of the LLC, S–Corp type entities?
Jake:
Exactly.
Travis:
OK.
Jake:
So there, when we talk to individuals, we recommend that they talk with
their accountant. Their accountant is going to have some very intimate
knowledge about their finances. That's what you determine, "Oh, you
know what? With this business and this type of income, I should be an
LLC" or "I should be an LLC taxed as an S–Corporation, I should be an
S–Corporation, I should be a C–Corp."
That's
something that's very, very specific to your situation. So we usually
recommend that you talk with an accountant, let them know about what
you're looking to do. Then you come back to us and say, "Hey, I want to
form this." Then we can definitely help you from there.
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