Questions and Answers

What are the advantages and disadvantages of incorporating?

         In the eyes of the law, once a person or group of people incorporates, the corporation is viewed as a separate entity from the individuals involved. This extends them a limited legal liability for the activities of the corporation and debts it may incur. Incorporating allows the company to attract investors and issue stock. The process may be costly and time consuming and does not protect from being “double taxed,” where both the individual and the company's profits may be considered taxable.

What is an “LLC”?

         An “LLC” stands for “Limited Liability Company” and is formed if one or more people want to have the corporation's protection from personal liability for business debts. This business structure also allows the pass-through tax structure of partnerships and sole proprietorships so the tax liability is passed through to their individual tax returns

What are the alternatives in establishing a business setup?

• As a: Sole Proprietorship - a business owned by one person

• Partnership – a legal relationship between two or more persons who carry on business together in order to make a profit

• Corporation - exists as its' own legal being. The owners of a corporation are its' shareholders.