I am not even close to your level and expertise, but to me it depends on the type of business and liability issues.
Generally I am cheap, and anything other than a straight sole prop or partnership always cost more money. I ALWAYS say check with your attorney, I don’t give that kind of advice, but I tell them the ramifications from my side.
But I do agree that if you do want to have that extra layer ( and not use a good umbrella policy) that you should become a corp. I am just not that big of a fan of the LLCs, you seem to do a lot of extra work and it is just clearer if you come out and say I am a corp instead of I am a LLC operating as a corp.
I am sure that doesn’t help, but I thought I would try.
Cris
From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Arnold M. Socol
Sent: Friday, October 24, 2008 7:51 AM
To: taxchat@yahoogroups.com
Subject: [taxchat] LLC or S or C-Corp
I gave a couple of classes this past month at an adult education school. I contributed to a 10 week program towards a complete business plan as the accountant. As part of my material I was asked to discuss the different "entities", sole proprietor, LLC, Corp, PTRs, etc. I have always felt more comfortable with the Corp and S-Corp for small businesses. One student said her research concluded an LLC was best for her. Her reason - simplicity. I advised that here in NYS the cost to become an LLC doubled with the cost of running classified ads in 2 newspapers for 13 weeks. For these startups every nickel and dime matters. After thinking about it it is less costly if they file as a single member disregarded entity on Sch C and not having to file an 1120 series return. The tax prep fees would be considerably less over time. Any thoughts on how you recommend the best entity for small startups.
Arnie
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