Question

  06/21/12, 7:07 am
i want to start a side business doing some building maintenance and repair. i will be the only owner and worker for now. should i start a llc or a corp, my accountant said a corp. was better. thanks so much
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United States   |   Illinois  |  Business Law
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Answer

Heewon O'Connor Says:

Jun 21,2012 11:03 AM

Creating a separate entity such as c corporation or limited liability protects you from personal liability. It is always a good idea to set up a corporation or LLC to protect your assets. It is hard to say which entity is better because it all depends on the characteristics of your business and how you want to operate your business. When you set up a C Corporation, you are taxed twice - when the corporation earned the money and when you get paid dividends. You are also required to follow some corporate formalities - annual meeting, keeping minutes and so on. An LLC can be more flexible than a corporation. The LLC is a pass through entity meaning there is no corporate level tax return. All of the income and expenses are passed through to the owners who report their share of the income and expenses on their individual tax returns. Since you are a sole owner, you may be entitled to set up a S-Corporation if you meet certain other requirements. An S Corporation is a tax election a C Corporation can make in order to eliminate the corporate level tax. Good luck and congratulations on your new business!


Heewon O'Connor
O'Connor Law Offices
1920 A Highland Ave 203,Lombard, IL 60148
630-544-4922
http://oconnor-oconnor.com

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