Reply
Established Member
Posts: 21
Registered: ‎05-22-2008
0

INC vs. LLC

I currently have an LLC that I started maybe 4 months ago doing internet retail sales. For now it's just a side business that I would like to eventually make my full time job opening up an actual retail location. I was wondering what the benefits of having it incorporated as opposed to keeping it an LLC would be in the short term for business credit etc. 


Starting Score: TU 597 EQ 582
Current Score: TU 597 EQ 582
Goal Score: 700 for all!


Take the FICO Fitness Challenge

New Member
Posts: 2
Registered: ‎09-14-2012
0

Re: INC vs. LLC

I would also like to know. bump.

Established Contributor
Posts: 511
Registered: ‎02-27-2012
0

Re: INC vs. LLC

I own an LLC not for credit purposes because I don't have any intention of scoring a bank or any of my vendors over. I actually did it because in the state I live in you need workers comp insurance if your an Inc. eventhough its just the owners working for the business and no employees. For an LLC as long as the the members are the only people working which in my case they are the only ones, then we don't need to get workers comp. And the insurance is very high and no need.

As for credit, I honestly don't think it matters. Banks just care about revenues, assets, profits. I have got 2 chase business cards for 27k....

Hope this helps....
New Contributor
Posts: 82
Registered: ‎04-05-2011
0

Re: INC vs. LLC

An LLC gives you the flexibility to be taxed as a sole proprietor, an S-Corp or a C-Corp. (if you qualify for the Corps) As far as I can see, an LLC has a lot more flexibility and less yearly requirements than the corps do. 

New Contributor
Posts: 72
Registered: ‎03-19-2011
0

Re: INC vs. LLC


mmmagique wrote:

An LLC gives you the flexibility to be taxed as a sole proprietor, an S-Corp or a C-Corp. (if you qualify for the Corps) As far as I can see, an LLC has a lot more flexibility and less yearly requirements than the corps do. 


I agree and think mmmagique is spot on!  The flexability for taxes with the liability protection of the traditional corporate vehicles (C and S-Corp.) sums up the main benefits of the LLC.  It is also more streamlined from a managment perspective, with the tradeoff of not having any stock issued (which could be sold to raise capital in the case of a Corporation).  Having had and operated both an S-Corp. and an LLC, I much prefer the LLC for most situations.  Generally less reports, taxes, and required meetings for LLC's as well.  Single member LLC's are possible in most jurisdictions while single member Corporations are generally impossible to establish with only a single member (usually require minimum of President and Secretary and/or Treasurer).

EQ FICO 695 (4/26/2012)
TU FAKO CK 723
Lender Pulls (for mortgage) 12/03/2012 - 698 EQ, 729 TU, 721 EX
Business Cards: Discover Business Miles and US Bank FlexPerks Cash Rewards
Personal Cards: Capital One, Chase Freedom, Chase Amazon, Wells Fargo Rewards, Amex Zync NPSL, Target, Chevron/Texaco Store Card and VISA, CareCredit
New Contributor
Posts: 132
Registered: ‎11-21-2012
0

Re: INC vs. LLC

Purely for business credit a Corp can carry a little more weight in getting credit.. Some actually require a PG if your a LLC no matter what but not for corps.. Like mentioned more paper work and requirements = responsibility and that equals a little less risk of default in some people's minds. And to add some states don't allow Corps to dissolve if debt is owed but a lot allow LLC's to.

Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
† Credit cards for FICO Score ranges: The score ranges are guidelines based on actual applicant approvals and having a FICO Score in a particular range does not guarantee you will be approved for credit cards recommended in that range.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.