INC vs LLC

[Camman]

Now, I know some of you around here are current or former small business owners and could maybe help me out with this simple question. I have a couple books on starting a small business and they all seem to very briefly touch on different types of corporation but always cop out with "refer to your states information on blah blah" I really just want to know a clear and concise answer to what's the difference advantages/disadvantages of styles of a company.

Right now I guess I could just file for a DBA and open an account with that name and that would be me running a sole propriotership (sp) business and that would be directly tied into my personal assets (none) and be my own liability. I figure this isn't a big issue seeing as how right now as a (very very small) service-based business there isn't going to be a lot of (read: no) neccessary credit lines, etc (of which I couldnt be approved for anyway). And the tax stuff would also be handled under my own name, correct?

However, I dont understand whats the difference/advantages of a Limited Liability Company and a Corporation. There's one computer shop in town that is an LLC and another that is "Inc." What's the difference?


(and hey prime, where's that article you showed me a part of a long time ago about owning/starting a small business...I think it would be a big hit with several of us around here :D )

[tefleming]

Things worth worrying about:
Every time you do work, you are incurring a potential liability. You will need to make sure that your service agreements have a well worded disclaimer absolving you of as much responsibility as possible. (Someone could sue you for a problem that developed as a result of your work for huge amounts of money if it somehow disadvantaged their business) (Not saying that they'd win, but you want to nip the possibility in the bud)

Second, you absolutely need to do some serious legal research or hire an attorney because in some states forming an LLC or other form of corporation is almost pointless because they will penetrate corporate protections and declare the corporation to actually be a sole proprietorship in the event of an unsettled debt or liability. This is particularly true of a "corporation" that has one stock-holder. A good lawyer will be able to answer your questions, advise a best course of action, and draw up the papers for between 250-1000 dollars.

[a2jfreak]

Check into forming a Captive Insurance Company and see if having that be the owner would benefit you.