Among the many decisions that Georgia entrepreneurs looking to get their new business ventures off the ground must make is that of operational structure. Should a company be formed as a C corporation, an S corporation or an LLC? Given the differences inherent in these three models, there is clearly no one approach that is right for every business. That said, LLCs have grown in popularity in recent years and there are a few reasons to look at that may explain why.
Inc. Magazine points out that an LLC can be established in any state. This gives business owners the ability to select their corporate headquarter location based upon tax implications or other factors and not be limited to only where they physically reside. An LLC structure also offers much greater day-to-day operational flexibility than does a C corporation. For example, there are no cumbersome minutes to keep and file and partners can more easily be added to or removed from the business. When compared to an S corporation, LLCs provide greater opportunities for ownership as non-entities are allowed.
Registering an LLC is generally faster and less complicated than registering a corproration. From a tax perspective, LLCs may be preferable due to the fact that they are taxed more like indivdiually owned companies. As Forbes explains, owners of C corporations are taxed but so too are the corporations themsevles, essentially resulting in a double taxation.
Owners should carefully evaluate the potential implication of any fringe benefits or payroll taxes of a proposed LLC structure versus a C or S corporation. Depending upon the nature of the business, what is best for one company may not be best for another.