Far too often, entrepreneurs are unaware that LLCs and corporations are very different. Although virtually the same from a liability protection standpoint, they are extremely different from a tax standpoint. A lawyer and a CPA can help you evaluate the pros and cons of corporations and LLCs, but in the meantime, the following are some basic guidelines: • In our firm, we use LLCs as the entity of last resort, because of the extreme junk fees – called the “Gross Receipts fee” that apply to LLCs (but not to corporations) in California. • In California, the initial $800 franchise tax is waived for corporations, but not for LLCs. • Licensed professionals cannot operate through LLCs in California • LLCs are best where the company will own real estate. • S-Corporations are best except where the corporation will have shareholders who are foreigners or other companies. Jeffrey Unger, Founder @eminutes
Source: eminutes
