LLC, S-Corp, C-Corp, Partnership, Sole P.

Which one did you establish?

[tsinoy]

Just wanted to see how other people structured their company for running their affiliate businesses.

My accountant suggested S-Corp as the top option, as it provides a higher level of income protection, however LLC has a better asset protection structure in place for lawsuits etc.

Maybe establishing a combo is better?

what have you established and what is the major advantage you're seeing?

[LifeinAsia]

We went with a C-corp instead of an S-corp mainly because we expected to have foreign investors (can't have foreign shareholders in an S-corp). On the tax side of things, C-corps allow you to "play" with the system a little more than with S-corps.

There are a lot of differences that apply to different people according to their specific tax situations. So your best advice is to talk in more detail with your accountant and a lawyer about your specific situation.

[FourDegreez]

LLC. Wanted the simple pass-through nature with the added liability protection.

[tsinoy]

had a consultation few months back and had been reading up on some books lately...

some suggest the combination of living trust, c-corp, llc to build a maximum asset protection and tax efficient system...

ie. living trust owns real estate, shares of the corp and units of the llc.

c-corp basically handles operation(c-corp is paper poor), llc holds the assets, another llc/llp could hold trading accounts, both llc are managed by the c-corp as general partner/controlling member.

[garyfugere]

Sole Prop and a liability insurance is simplist.

As for the liability issue the corporation does give you some liability protections that a sole prop does not. But every entrepreneur no matter what should have a personal liability umbrella insurance policy. Don't believe all you hear about relying on a corporation to protect you against liabilities. The corporate veil can be easily pierced.

In a former life I owned a company called Judgment Recovery. Its function was to collect judgments. It is a very simple matter to appear before a judge and tell the judge that the principals are about to abscond with the assets to thwart creditors. In moments the corporate veil has been pierced. Within hours we were towing away the car. As for lawsuits, it is a little tougher to pierce the corporate veil, but it is done everyday. If a customer slips and falls while entering your business. The attorneys will sue the corporation, you personally, the landlord, the manufacturer of the door, the carpet mill that made the carpet and anyone who lives in that zip code.

The judge usually dismisses everybody but the corporation and you personally. Judges are more and more willing to hold officers of closely held corporations personally liable (especially if you have personally guaranteed other corporate debts). If and when they win the lawsuit your liability insurance should kick in and pay the settlement.

[edited by: jcoronella at 8:33 pm (utc) on April 29, 2006]