Q&A: What is the distinction between an LLC, an INC, and a Corporation?
I want to launch my own online web design company. I am a web designer, but soon I intend to grow into other services such as SEO, Social Media marketing and video marketing. I am a customer website designer. Basically, market a complete offer to local companies.
An LLC will be advantageous for you. To begin, if one of your clients sues you for whatever excuse, they must sue the LLC, not you personally; this helps secure your personal properties. Since the nature of work you perform carries a limited risk of litigation, I have seen clients sued when their clients did not think they got the services they arranged for and charged for.
Up the street I want to develop my own websites, create my own merchandise and create e-commerce pages. You will purchase and flip pages. Sites. Is there a way to have one company and to own other sites in the same company, even if they may be in entirely separate market names? What are each form of entity's benefits and disadvantages? I know there are many moral, institutional and tax benefits for any kind of entity, but I am not quite confident. But I'm not really positive I tend more toward the LLC. Some suggestions sure will benefit me.
To address the issue of if several websites may be owned by a single LLC, the answer is yes. The issue that arises is if you want any of the LLC's websites/assets to be liable for seizure and payment of the verdict if they win the case. Bear in mind that they would be unable to prosecute you directly, however they will be allowed to sue the LLC and seize any properties held by the LLC. With this in mind, it might be prudent to split your website design and development company from your website procurement business. Essentially, you will have an LLC that dealt directly with clients (active company LLC) and another that would house all of the websites you were trying to flip (website flipping LLC) (holding LLC). This way, once a client files a lawsuit against your successful company LLC, they would be unable to access the websites owned by your holding LLC. You could establish the successful business LLC first and then establish the holding LLC when required.
I will suggest forming the LLC in your home state. The explanation for this is that if you create an LLC in Nevada, for example, you would be required to international qualify it in your home state. Once your LLC is qualified in your home state, you would forfeit all tax benefits and potentially all wealth security benefits provided by Nevada legislation and statute. Additionally, you would be required to pay the premium in all jurisdictions, which will result in additional costs both now and in the future.
Second, you will almost certainly profit by electing to tax the LLC under the "s" classification. If you use a "s" elected LLC, you will greatly lower your self-employment taxes and cover your personal gain with company expenses. If you do not "s" elect your LLC, it will be treated as a "disregarded company," and you will be taxed as a sole proprietor (this means that you will pay 100 percent of the self employment taxes without the capability to reduce it at all). To's' elect your LLC is a straightforward procedure that involves just the submission of two simple forms with the Internal Revenue Service.
Finally, although this argument is unrelated to wealth security or tax avoidance, it is critical to understand that being able to demonstrate to clients that you are an LLC helps to improve the client's perception of your company. And if it is only you, it would become more developed and lend prestige to your company in the minds of some of your future clients.