Incorporating

Why choose a corporation vs. an LLC?

A corporation is a separate legal entity from its owners created under state law. The defining legal rights and obligations of the corporation are: the ability to sue and be sued, hold assets in its own name, hire agents and sign contracts.

In summary, a corporation has the following benefits:

• Liability protection like an LLC: Forming a corporation draws a line between personal and business assets, helping protect your personal assets from risks or debts associated with running a business. This means that if the business can't pay a creditor or gets sued, the creditor cannot legally come after the member's personal assets such as a house or car.
• Management: The owners of the corporation are called shareholders. The directors are responsible for long-term management and made the major decisions regarding the corporation. The officers are responsible for day to day operational activities of the corporation and usually consist of the President, Secretary, and Treasurer.
• Control: You may choose to incorporate your business to raise capital and offer stock options to employees. Incorporating a business allows for unlimited shareholders (not applicable to S-Corps).

In order to retain corporate existence, one must observe certain corporate formalities such as holding an annual meeting, taking corporate minutes, issuing shares and appointing officers.