Six Powerful Reasons to Incorporate or Organize an LLC - Protect yourself from personal liability
- Corporation or LLC signs lease - you’re not personally liable
- Corporation or LLC borrows money - you’re not personally liable
- Corporation or LLC buys goods and services on credit - you’re not personally liable
- Business Tax Deductions
- Take what would otherwise be non-deductible personal expenses and turn them into legitimate deductible business expenses
- Use of motor vehicle by Corporation
- Use of part of your residence by the Corporation with the utilization of a lease not considered a "home office"
- Annual meeting of shareholders and directors in far away or "resort city" and deduct for taxes
- The goal is to convert as many non-deductible personal expenses into legitimate deductible business expenses, in this area, there is no limit to what the mind can conceive
- IRS Form 1040, Schedule C (Profit or Loss from a Business) which is used by sole proprietors to report the businesses income and expenses is the target of many IRS audits, however, compare this to the audit rates of similar businesses that have incorporated or established multi-member LLC and the audit rate is almost NIL
- Privacy
- The Corporation or LLC can be established in such a way so that shareholder/owners remain anonymous, many times the same anonymity can be accomplished for officers and directors.
- Use of a Marketing framework
- Hold the business out to all as a Corporation or LLC
- Give the business the appearance of being much bigger than it is
- Attract investors more easily
- Raising capital
- Because of the ease of transfer of ownership and the "separate entity" concept of the Corporation or LLC, it is much easier to attract investors than otherwise
- Easy transfer of ownership
- Put real estate in Corporation or LLC and transfer through private agreement, i.e. stock transfer rather than formal real estate transfer and closing
- Re-title asset to a Corporation or LLC yet continue to maintain control.
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