Corporarion Filing Archives - Global Multiservices

I know that there are a lot of zealous entrepreneurs out there eager to grow their businesses. But it is an arduous dilemma to choose what kind of corporation you should file. Should you go for an LLC Filing or a Corporation Filing. Though there are many pros and cons of both, I always say that the major aspect that you should consider before filing for any is the size of your company and the knack of your organization. But whatever it is you know that you could rely on Global Multi Services for adept advice. In this blog, I am particularly targeting your concerns for an LLC, so sit tight.

What is an LLC

“No one knows everything but everyone knows something” keeping this philosophy in mind, I do want to exclude the LLCs definition from this blog. I am sure most of you know that LLC stands for Limited Liability Company, but there is much more hidden in this abbreviation than just the full form. As the name suggests itself the LLC gives protection to your personal assets, which means that if in the future somehow your company gets into heavy loss and debts then your personal assets will not be susceptible to the retrieval of your debts. Each state has some of its individualized sets of regulations for the LLCs, so you might have to check with your state’s regulations for the same. And although different states could have some different regulations, you do not need to worry as such differences are certainly not radical. Also, a majority of states give permission for Single- Member LLCs. Another important point is that the owners if there is more than one, of an LLC, are called members whereas the owners of a corporation are called Shareholders. Some specific business kinds like banks and insurance companies can not register as an LLC, so if you are one of these you should consider Corporation Filing.

Perks of An LLC

The LLC comes with a number of perks or merits that could not be constrained and written in a single paragraph. Hence I am going to write them in different segments.

Pass-Through Taxation

There is a thing called Double Jeopardy or Double Taxation that the C corporation is prone to. Under this Double Taxation, the earnings are taxed twice, first in the form of corporate tax at the company level and then the dividends of the owners are taxed at the personal level. But the LLCs or the S corporation are exempted from this. In LLCs, there is something we call pass through Taxation, in which the profits and losses of the company are not taxed but the owners are taxed on the individual level. And that’s so it is called pass-through taxation because all the profits and losses pass through the taxation process. Another great thing about pass-through taxation entities is that they do not have to file tax returns as an entity instead they could file an information return, all and all the pass-through entities do not have to pay taxes at a company entity level.

Versatility 

Another great aspect of the LLCs is their versatility as there are a lot of options in a number of fields like there is no limit on the number of owners, there could be a single owner or sole proprietorship, then there could be ten owners or even hundred owners. On the management level also, LLCs can appoint many members at a single post, for instance, they can appoint one or more managers and they don’t have to be managers only, they could be either members or one of the owners or non-members. Then in some cases, LLC also gets to decide what kind of taxes they want to pay. If they want to be taxed as an S corporation then they will be a pass-through identity, or they could choose to be taxed as a C corporation.

Simplicity 

At last, unlike a corporation, the LLCs do not have to be that much programed. They do not have to appoint CEOs, CFOs, BODs, and arrange annual board meetings

Conclusion 

I think I have listed enough points that you could make up your point between opting for an LLC Filing or a Corporation Filing. But still, if you want to find more about LLCs, and corporations as well, you are cordially welcomed at Global Multi Services and will help you to file the same with the assistance of our proficient experts in this field.


Many factors have to be considered before I suggest you any opinion on these two. But first of all, we have to know the basic difference between An LLC and A Corporation and list out there for and against.

What is an LLC?

An LLC is an abbreviated form for a Limited Liability Company. As the name suggests, LLC sunders your assets from your business assets. So in any worst-case scenario if you suffer some loss in your business and get under debt then only the money that you have invested in your business will be used to pay off and your assets like your home, your vehicles, and other personal estates or assets will remain sound.

What is a Corporation?

It’s a legal organization that is completely discrete from you if you are one of its owners. To form a corporation you need other members, as you can not be the individual owner, and these owners or members, along with you, will be the common shareholders. One good aspect of forming a corporation is that you or any of its members will not be personally at fault for any of its loss or debts. And on the other hand, the shareholders will have access to dividends and stock inflation.

LLC Vs Corporation

There are significant differences between LLCs and Corporations, and I will be going to discuss some of those in-depth and others, that are not much important for trucking businesses, with just an overview.

Aspects of ownership in LLC and Corporation

Ownership is one of the most important things in a business, largely if I talk about trucking businesses. This one aspect can either smooth out your business or severely entangle it. Well in LLCs the owner have the liberty to give out the profit shares among its members, regardless of the financial endowment of the members to the company. So, this adds an advantage while organizing the company’s ownership.

In the case of forming a corporation, there is no individual owner but shareholders of the company. And gains and losses of the company are dispensed equally among its members. Hence there is no single sheep to be butchered when the company faces any losses.

Different Taxation for LLCs and Corporations

In the trucking business, there are a lot of expenses to deal with like permits, truck maintenance, and many more. So, what kind of taxes you are going to pay plays a key role in making profits.

I’ll be honest that when it comes to filing taxes, LLCs taxation is easier than Corporation taxation. But there are different tax advantages that these two provide.

I am estimating that many of you are unknown to the technical terms of taxation, plus it would be a lot of hassle for you to go through all those technicalities. So, I am going to cut the jargon and describe it in Lehman’s terms.

When it comes to taxation in LLCs, the profits directly go to the owner or owners, in case you have many members, and gains and losses are not announced on business levels but individual tax returns.

On the other hand, in corporations, there is a concept called Double jeopardy. Because corporate are treated as individual legal entities, they pay taxes at many levels such as taxes on profits, corporate tax, and they also pay taxes on dividends they share with the shareholders. Along with that, dividends are taxed twice, as they are not tax-deduct able like bonuses and salaries. And this leads to Double jeopardy.

Legal entity and Tax entity?

As I am taking you through taxation, legal entity and Tax entity is another widely asked query. So what’s the difference between a legal entity and a tax entity? How IRS looks at your business is termed as a Tax entity, and accordingly, you are taxed by IRS. In other words, when you are an LLC, registered under your State, you won’t be taxed by IRS as they don’t recognize the same. And for taxation, you might get considered as an s-corporation, c-corporation, or sole-proprietor. All and all, Legal entities are ordered with your state, and Tax entities are ordered with IRS. But to get an Employer Identification Number(EIN), you need to individually register your taxation structure to the IRS.  

Conclusion

I think I have made enough suggestions, for you, to end the dilemma of choosing between an LLC or a corporation. And if I suggest you, it solely depends upon the size of your trucking company and your organizing capacity that will help you choose between an LLC or a corporation. Although, a corporation requires a lot of staff, annual meetings, big taxation, and other things.

In case you are not satisfied with my suggestions, given above, I would recommend you visit our website Global Multi Services.

As we have a highly experienced team of experts who would be more than happy to help you in resolving all your queries and they will also mitigate for you the trouble of filling the paperwork of the same.