LLC , S-CORP, or C-CORP??

Hi im starting an internet business and going through development right now. As far as opening up the company im having trouble on which business would be smartest for me to open. I have never done an internet business before and hopefully someone with experience can give me some help. I plan to get investors to invest in the internet site/company, and i know they are very particular about scrop c corp and llc. Ive been reading about it but still unclear on m best solution, please some insight.

Consult your accountant.

If you're doing passive sources of income such as automated websites and real estate then an LLC is the best bet. For something you will be actively running you will be safe with an S-corp.

As hatteras said though, best to consult an accountant, treat the consultation as an interview(make sure the accountant offers a free initial consultation, otherwise, they're not worth your time) and remember that they work for you.

I'll see if I can get my dad to chime in on this as he's a CPA with almost 40yrs of experience and currently runs his own tax business. He advised me in setting up my first business as an S-corp as you only pay taxes on business income and don't get "double dinged" as is the case with a C-corp where you are taxed on both business and personal income from the business.

LLC's, S and C Corps can operate with liabilities limited to the extent of the investment or net worth of the business entity.

LLC's can be as simple as a 1 person ownership and only a personal tax return need to be filed. LLC's can also be a partnership between 2 or more partners, (a married couple is considered to be only 1 partner). In either case your liabilities are limited to business assets and not your personal assets.

S Corps are small corporations with 100 or less shareholders and could be as small as 1 shareholder. Shareholders could also be employees or simply take profits or loss as distributions of income or loss which transfer to your personal tax.

C Corps are unlimited as to how many shareholders can exist. C Corp shareholders can be employees or just shareholders. C Corps are taxed as separate entities. Income that transfers to your personal return from a C Corp is generally wages and dividends.

I would suggest you begin as an S Corp since you will have more than 1 shareholder and then become a C Corp when you grow larger than 100 shareholders. In your startup year's you may have tax losses from the S Corp that could offset other taxable personal income.

I could help you establish as an S-Corp with IRS. I could also consult and prepare all of your tax returns.

That's also probably the most simple explanation I can give you. Any questions can be submitted to me at my email. I don't spend a lot of time on these forums.

Bill Masser CPA/EA
WM030303AOL.Com

This was posted in another thread on here.

C Corporation vs S Corporation vs LLC

everyone thank you so much, this is advice you have to pay for, i really appreciate everyone's experience and knowledge.

This is advice you should pay for. Someone who knows what they are doing needs to look at your specific business and situation.

An S, C or LLC are great business forms for the right situation.

For an actively managed business, either an S-corp or C-corp. You may need to be a C-corp if you are courting investors. For passive income, LLC. For asset protection purposes, an LLC is the only way to go, but that can be integrated into your ownership structure with the S or C-corp by having the LLC own the shares. In the case of the S-corp shares being owned by the LLC, the LLC would have to elect taxation as a S-corp.