Best form of Incorporation for a consultant? C, S or LLC?

[Lokai]

In the USA what would be the best form of incorporation for a single person consultancy / application developer? C, S or LLC? I'm married with children if that's a factor.

It would help if you stayed at a Holiday Inn Express last night but any experiences & "amateur" advice would be appreciated.

 

[starl]

I'm a single person consultancy/application developer - first year full-time and am currently sole proprietor. I'm feeling out my income level before I upgrade. Course, I work with Bill and he handles all the legal stuff - techincally, he contracts me.
But, because of the legal issues (to protect yourself, mostly), it you're alone, you might want to consider going up to the next level - an LLC. If I understand correctly, the business becomes an entity - and you an employee. And if your business spends all its wages on employees, it's non-profit... I'm don't understand all of it - but it does offer a person more protection.

check out the irs site- it does have good info for starters - or your local sba.

 

[TommyGun]

Re: Best form of Incorporation for a consultant? C, S or LLC

Here is a great site for information on small business taxes.

IRS Small Business Tax Center

 

[Zack Barresse]

The best part about having an LLC is it's free to obtain.

 

[Smitty]

Re: Best form of Incorporation for a consultant? C, S or LLC

The best part about having an LLC is it's free to obtain.

Not in California. $120 or so a year to the entity that represents you (we use www.legalzoom.com), and $820/year to the state for the annual filing fee. (But California IS NOT a business friendly state!)

It's still a great idea as it insulates you legally. I made my boss do it just for liability reasons when he bought his family avocado grove. If a contract laborer falls out of a tree while picking, he can't be held personally accountable in a lawsuit, just the LLC and its assets. Whereas with a sole proprietorship you could lose everything. With an LLC, you can also be "CEO", in case titles mean anything to you.

Your accountant would be the best place to start, as he/she will be able to tell you about state & federal requirements.

Smitty

P.S. Some friends of ours just sold their Holiday Inn Express (for $7 million), and they now have all kinds of problems because they held it personally and not in any type of corporation.