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Me and some partners are getting ready to start a holding company, our conundrum is that none of us is sure if we sshould go for a Corporation or an LLC for the holding company. Does anyone have any experiance with this?
To determine what is best you need to analyze your choices.
Question: Do you plan to be profitable?
Yes, Real Corporations, pay far lower taxes, that means you`ll have for more money after taxes.
No, Rethink your plan.
Question: Is Liability a Concern?
Yes, then consider doing business in a proven entity. That would be a real corporation. The LLC is losing the battle. If you consider the sole reason it exists today is to replace the LP that was originally intended to limit liability, BUT FAILED only after it was tested in court, and that the LLC is losing those battles today; Then you`d be better off in a real corporation, they have been around longer than the constitution. We know how their treated.
No, rethink your plan.
Question: If you make money do you want to take advantage of tax free deductions?
Yes, Real corporations have more write-offs.
Do you want to be audited a lot?
No, Real corporations have the lowest audit potential, less than 0.24%
Yes then choose any other entity, they will all require that you file a Schedule C which has over a 3.0% likleyhood of audit, in addition to the high potential for the pass through entity.
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Richard Fritzler
Not all corporations are the same, some are more equal than others.
www.OweLessTax.com
Phone 800 590-6612 We answer questions.