[Music] hello and welcome to an edition of Genesis Law Firm teaches today's topic is this one LLC or corporation which is better this is a very frequently Asked question should I form an LLC a limited liability company or should I form a corporation for my new business the answer is neither is necessarily the better option it depends upon you and what you want to accomplish with your business in this video we're going to go through the high points of this discussion which is better an LLC or a corporation llc's are the most popular entity Choice available including uh when compared to corporations but corporations do have their advantages by the way there are many other ENT types out there you could be a sole proprietor a partner you could be a limited liability partnership a limited partnership and all of these entity types have their pros and their cons by the way if you form a sole proprietorship or a partnership there are probably more cons than Pros usually you won't want to choose those two options you'll want one of these other options that I mentioned a limited liability entity like a corporation or LLC in today's video we're going to focus exclusively on llc's and corporations because they are the most popular two entity types let's first look at corporations and their advantages corporations have a very strong liability shield for their owners in fact this is the reason why there are so many corporations out there when corporations first came into existence it was the only way that you could create an entity Shield of this type so if you really wanted to protect the individual's assets and only expose whatever might have been invested in the business then you would have chosen a corporation it's also what the big boys use if you want to be like a Microsoft or a Boeing and go public then you'll want to be a corporation similarly if you want to associate with the big boys if you want people to think that you're big even though perhaps you might not be if you want that kind of prestige then maybe you would form a corporation rather than an LLC disadvantages as I mentioned there are some drawbacks here one of the biggest is that if you form a corporation the way the big boys do you subject yourself to double taxation there's taxation both at the corporate level and at the individual level so most people won't want to form a business exactly like Microsoft or Boeing instead people who form corporations will at least initially choose to be taxed under the S corporation election and that means there's only one level of Taxation but you can only do this while the corporation is closely held and there are certain other restrictions the I think biggest reason why people might choose not to form a corporation would be the inflexibility of the corporate structure you're almost always going to have I shouldn't say almost always you're always going to have a board and Executives and that can be a cumbersome way to do business most people would prefer to do business either in a way that's similar to a sole proprietorship or a partnership because of the ease and how the decisions are made next let's look at llc's limited liability companies some people say that llc's are the best of all worlds and I can't say that that's necessarily true but there are many advantages one of the big advantages is is that you get a corporation's liability Shield you get the same protection for the owners that a corporation provides That's Unique among all the other entities out there so these are the two best in terms of their entity Shields with an LLC you get the most flexibility in terms of how you choose to be taxed even more flexibility than with a corporation so if you're trying to save money tax-wise an LLC might be a good choice but ultimately most if you want to go public maybe you're not ready to do it now but you intend to do it in the future or if you want to associate yourself with those big dogs and I should mention that you can form an LLC and convert it to a corporation at a later date so that might be how you would truly get the best of all worlds if you would like more information on this topic or related topics you can go to our website and you might want to click on the resources tab that's where most of our videos and articles are and if you would like the address for the article associated with the same topic that we're discussing today you can find it [Music] here