Should my company be an LLC or a corporation?

Should my company be an LLC or a corporation?

Setting up a company with the proper business entity type can be a bit confusing. Much of the decision just depends on what you are doing with respect to the overall type of business, projected income, and overall goals for the company. For example, if you are just starting a small part time lawn care business with projected annual revenue of about $20,000.00 and no plans to grow or expand, then a simple Sole Proprietorship should work just fine. However, if you are planning on growing the business and project annual sales of over $100,000.00 and profit of $50,000.00 within a couple of years, then an S-Corp would most likely be your preferred company type. In many cases, like rental property investments, the primary consideration is liability protection. So, accordingly, an LLC might make the most sense. In any case, getting the initial setup right and having a good set of books is critical to the success and long term growth of any company. In my experience, try to spend as much time planning as possible. This will prevent you from having to go back and fix things later.Jim Chapman byline

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