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Professional Corporation vs LLC (Differences and Requirements)

Professional Corporation vs LLC

If you want to run your own business, you may wonder about the differences between establishing a professional corporation vs. LLC. If so, I am here to help. Usually, start-ups benefit from establishing a professional corporation while small businesses realize more advantages when establishing an LLC. 

However, there is no cut-and-dried decision when it comes to forming a corporation or LLC. You need to review the differences and requirements for each entity. 

I can help you in the decision-making process. You will need a top business attorney with my skills and knowledge to help you create the right business entity for your company. Contact me for guidance at sam@mollaeilaw.com anytime.

Before you decide, you will want to read the following article. It can help you clarify the distinctions between owning a professional corporation vs. LLC small business. The information below will help tune you in on what each entity offers for the small business owner or entrepreneur.

 

Reviewing a Professional Corporation vs. LLC Business Formation – Which Is Better?

When you review the benefits of a professional corporation vs. LLC business structure, you need to define each entity and see how each formation differs in taxation. You also need to consider how each type of formation can benefit your business from a promotional standpoint.

If you have questions along the way, I can answer them for you. Contact me with your inquiries at sam@mollaeilaw.com. I am always ready to assist small business people and entrepreneurs in making their business dreams a reality.

 

Reviewing a Professional Corporation vs. LLC Business Structure – How is a C-Corporation Set Up?

When you are surveying a professional corporation vs. LLC business, you should first define the C-corporation and note the differences. A C-corporation is a traditional corporation and the most common type of domestic company in the US and the world.

Many of the products and services we purchase on a daily basis come from incorporated companies. If you want to draw angel investors to your business or wish to go public, you may want to consider establishing a C-corporation.

The limited liability company also referred to as an LLC, is a popular choice for smaller companies. This new entity type offers tax advantages that a C-corporation does not. Taxes pass-through to the owners of an LLC, and, therefore, the LLC is not taxed.

If you establish a C-corporation, you are subject to double taxation. In other words, the company pays taxes on its income and the shareholders and owners pay taxes on the dividends of the shares. If you want to avoid paying taxes twice, you either need to form an LLC or establish an S-corporation business.

I can assist you in finding out which structure will best benefit your company’s operations. Contact me today at sam@mollaeilaw.com so we can outline what works and will not work for your start-up company or small business.

 

How Is the Structure Different When You Compare a Professional Corporation vs. LLC Business?

The structure, when a professional corporation vs. LLC business is compared, is significant. For example, a traditional C-corporation features a hierarchy – one where the power behind the operations is divided among the shareholders. The shareholders (or stockholders) appoint the directors who make the decisions for the company.

The directors appoint or employ company officers to run and manage the company. The stockholders or owners who possess more company shares have more influence with respect to voting and making money. 

 

The LLC Business Structure

The LLC members run the LLC and basically decide what needs to be done to operate the business profitably and successfully. Owners decide the following:

  • The division of ownership
  • Profit allocation
  • Operational matters

Basically, an LLC, when you review a professional corporation vs. LLC, is essentially similar to a sole proprietorship (if a single person runs the company) or a partnership (if a couple oversees the company). However, the liability protection that is provided is much like what owners receive when they set up a corporation. 

When an LLC is established, the LLC members create the rules for division or power and profits. 

 

When Should You Form an LLC?

Usually, an LLC is a better choice for a smaller company that has only a few workers and principals. 

 

What are the Key Differences to Consider When You Review a Professional Corporation vs. LLC?

You want to learn the key differences when assessing the benefits of a professional corporation vs. LLC. The following information elaborates and underscores these differences.

Ownership of the Company

An LLC does not have to have more than one owner to survive. A corporation must establish a base of owners and shareholders to thrive in its particular field or industry.

Meetings

You do not need to regularly hold meetings if you establish your company as an LLC. A corporation, however, does need to hold meetings, as this is a legal requirement for establishing this business entity. 

That is why you need my help when you establish an LLC or corporation. You need to know what to do to comply legally. I can help establish your business so it enhances your professional standing and reputation in the business community. Contact me at sam@mollaeilaw.com so we can initiate the business formation process.

Documentation

A corporation requires much more paperwork than an LLC to operate as a business. Documents must be routinely submitted to remain legally compliant and maintain the company’s corporate status. Owners must hold and document annual shareholder meetings and maintain minutes of corporate meetings.

LLC owners do not have to follow the mandates that corporate owners must obey. However, both a corporation and LLC must secure the services of a registered agent. A registered agent handles and processes the paperwork for a corporation or LLC when it is being formed and thereafter.

Growth

A C-corporation often invites the interest of angel investors or venture capitalists – investors who wish to invest in a start-up operation. Therefore, by establishing your business as a corporation, you can more easily transition into a public company. You can also receive the funding you need for expansion at a lower cost.

An LLC does not have this type of advantage. However, many LLC owners are not interested in offering public shares on the stock exchange. Their primary interest is to save on taxation and protect themselves from lawsuits. 

If someone sues an LLC, the owners’ personal assets, such as car(s) and real estate are protected. 

I can further guide you on what you need to do to set up a C-corporation, S-corporation (if you wish to avoid double taxation), or an LLC. Email me today at sam@mollaeilaw.com.

 

What Happens Next?

As you can see, there are distinct differences and requirements when you review a professional corporation vs. LLC business. Let you help you establish your company so it will meet your business goals now and in the future. Contact me at sam@mollaeilaw.com and let’s discuss your options now.

Sam Mollaei, Esq.

As a Business Lawyer for Entrepreneurs, I help entrepreneurs start their U.S. business without dealing with complicated legal forms by taking care of all of the paperwork so you can make more money, have more freedom, and spend more time doing what you love.In 2013, I took the leap to start an online law firm so I could help entrepreneurs start their business and so that I could work online from anywhere in the world at the same time (...best decision I've EVER made).Since then, I’ve assisted more than 3,000 entrepreneurs start their U.S. business with more than 1,200+ 5.0 Star Google Reviews from clients who love my quick and streamlined online service.If you're interested in starting your business, take the first step by booking a call with my team below:

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