One of the first decisions every business owner needs to make is what entity to file their business as, and that choice is typically between LLCs vs. Corporations. Really the decision comes down to what fits the needs of the business owner and the business, but there is still discussion on which entity is best. Here at MyCorp, we gathered together a panel of professionals to get their expert advice on LLCs vs. Corporations and which is the best to form for your business. Which side are you on?
1. “Generally speaking, corporate status is preferable. Banks typically don’t view LLCs as favorably during the loan application process and corporations don’t pay taxes on fringe benefits. These include group-term life insurance, medical reimbursement plans, medical insurance premiums, and more.”
- John Boyd, Principal, The Boyd Company, Inc.
There are several parts to maintaining a corporation throughout the year in order to remain in compliance with the state. Maintaining proper corporate documents is essential to running a successful corporation. Without it, the corporate veil may be pierced and the shareholders may be personally liable. The corporate veil is the barrier that separates the corporate entity from the people who own the corporation. This is what allows the corporation to be its own legal entity capable of buying property, suing, and being sued. If this veil is pierced, then the separation between the corporate entity and the owners is destroyed and the individual owners of a corporation can be held responsible for all of the corporate liabilities. The last thing any corporate shareholder wants is to be personally responsible for the liabilities, losses, and debts of a corporation. Continue reading