I know what they stand for but which one should a reseller apply for? I don't want to get sued and lose my home :D

INC, or incorporation, is a high level of registration. Incorporated companies have special tax benefits and work under a special agreement. Many individuals incorporate themselves to take advantage of the protection offered from such a mark (the company, not the offers are sued). you should however note that incorporation costs several hundred (4300 in CA) for state fees plus anywhere from 100-500 or more in legal fees.

LLC or limited liability company is a much more simplistic way to registered your company. The fees are lower as is the paper work. Limited liability companies help to protect the offers while establishing a legal, government recognized business. There is less protection than in incorporation but less rules, especially in regards to the irs.

Hopefully someone else can provide more details on the benefits/ costs of both options.

Take some time to read the following:

C-Corporation: http://incorporateus.com/Information/Ccorp.htm
S-Corporation: http://incorporateus.com/Information/Scorp.htm
LLC: http://incorporateus.com/Information/LLC.htm

Disclamer: In no way I am recommending/an affiliate of incorporateus.com. They just have these information quite useful

cheers,
:beer:

Originally posted by TedS
you should however note that incorporation costs several hundred (4300 in CA) for state fees plus anywhere from 100-500 or more in legal fees.

LLC or limited liability company is a much more simplistic way to registered your company. The fees are lower as is the paper work. [...] Generalizations that are not always true. In New York, for example, the state fee for incorporation is less than that for formation of an LLC. There's no more a need for a lawyer to file for incorporation than there is to file for an LLC -- I'd recommend you consult with a lawyer in either case.

An LLC has much simpler organizational and record-keeping requirements. No need to maintain minutes of annual meetings, for example. In general, an LLC would mean you pass tax liability through to the owner(s) personal income taxes. The same is true for an S-corporation, but not for the more common C-corporation. In general, the process of incorporation with a state does not distinguish between those two, by the way, the S designation is gained through application to the IRS.

Both a Limited Liability Company and incorporation confer the same protection against legal liability. But it's a limited liability in either case (get it?) -- it's still possible to be sued personally in the case of negligence involved in running the business. Generally, though, the protection afforded is a good thing.

There's a good chance, if you're an individual operating your business as a reseller, that the LLC will be your best option. But your specific financial situation might mean that you could take advantage of the lower corporate tax rate. That was the case when I first incorporated; it more than made up for the added expense of having an accountant to actually do the taxes! Now, with a different business, incorporation again was the best bet because there are a number of shareholers... bottom line is, it's not a simple question and it's not likely that anyone here can give you an absolute right answer without knowing much more about your situation.

Our company is an LLC, that's pretty straightforward to set up.

It seems to me, however, that each state has its own definition of what an LLC is and can do, so an LLC in California wouldn't be the same as an LLC in Texas.

A cheaper alternative, if you're not afraid of liability issues, it to file a DBA: you pick a name, sign up a paper, and you're done. I don't thing you need an employer ID...

Thanks a lot for the info. I was wondering if there is a yearly fee for either LLC of INC? Did anyone in here register an LLC from NY? It said that i'm suppose to advertise in the newspaper or something to annoouce the formation of my LLC? :confused:

Check out http://www.mycorporation.com
Great resources and it explains alot about the differences between Inc. and LLC. It also explains why alot of companies Inc. in Delaware.

They look like they have pretty good fees too. To Inc. in Delaware or Colorado (where I live) would be around $200..

laterz,
raqworld

-Not promoting the mycorporation.com site, but I have found them very useful and the rates are some of the best I've seen for what you get.

Originally posted by MadCool
Thanks a lot for the info. I was wondering if there is a yearly fee for either LLC of INC? Did anyone in here register an LLC from NY? It said that i'm suppose to advertise in the newspaper or something to annoouce the formation of my LLC? :confused: That is correct. It's not necessary for incorporation, but if you create an LLC in New York you have to publish a Legal Notice to announce that fact in two newspapers in your county (the county clerk's office will tell you which ones) within 120 days.

There is no annual fee either for incorporation or for an LLC in New York. If you incorporate, though, you will have to pay an annual franchise tax -- in addition, of course, to income taxes.

Originally posted by JayC
That is correct. It's not necessary for incorporation, but if you create an LLC in New York you have to publish a Legal Notice to announce that fact in two newspapers in your county (the county clerk's office will tell you which ones) within 120 days.

There is no annual fee either for incorporation or for an LLC in New York. If you incorporate, though, you will have to pay an annual franchise tax -- in addition, of course, to income taxes.


Thanks! Guess it's LLC for me!

In all but two states having an LLC does provide you the same protection as a C or S Corp depending on how you handle your taxes, books, etc...

Basically it boils down to this...

Do you want to go public on the stock market??

No??

Then go for the LLC, Just make sure that you keep everything separate. Books, separate checking accounts, etc...

All of that would be the advice from my lawyer when I was going through this same debate in my head.

EDIT: At least that is how I UNDERSTOOD my lawyer.... ;)

Michael

"if you create an LLC in New York you have to publish a Legal Notice to announce that fact in two newspapers in your county (the county clerk's office will tell you which ones) within 120 days. "

Hmm Do they really check? Does anyone know by chance which newspaper in NY qualify? NY Daily News? NY Post?

Originally posted by MadCool
Hmm Do they really check? Does anyone know by chance which newspaper in NY qualify? NY Daily News? NY Post?

They will probably just require you to lodge the newspaper clipping as a proof...