Currently I am a sole prop. Is there any benefit to forming an LLC or S-corp from a business credit perspective? I have avoided doing so to this point, since the costs of formation as well as the additional taxation issues make things slightly more complicated than with a sole prop and given the nature of my buisness the liability protection wil not really do much for me if anything.
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@peaceonearth wrote:
@red259 wrote:Currently I am a sole prop. Is there any benefit to forming an LLC or S-corp from a business credit perspective? I have avoided doing so to this point, since the costs of formation as well as the additional taxation issues make things slightly more complicated than with a sole prop and given the nature of my buisness the liability protection wil not really do much for me if anything.
Beside business credit!!!
Think of it this way if you're a SOLE OWNER: Let say someone gets hurt in your company or something else went wrong, you can be sued and if they win they'll go after your personal assets such as your house, car, personal saving etc..
If your company is formed as an LLC or INC they will go after the corporation and your personal assets will be protected.
I'm fully aware of that aspect, but given the way my business works the chances of that happening are extremely limited. I'm only curious to see if there is a benefit from a business credit perspective.
@gen-specific wrote:
@red259 wrote:
@peaceonearth wrote:
@red259 wrote:Currently I am a sole prop. Is there any benefit to forming an LLC or S-corp from a business credit perspective? I have avoided doing so to this point, since the costs of formation as well as the additional taxation issues make things slightly more complicated than with a sole prop and given the nature of my buisness the liability protection wil not really do much for me if anything.
Beside business credit!!!
Think of it this way if you're a SOLE OWNER: Let say someone gets hurt in your company or something else went wrong, you can be sued and if they win they'll go after your personal assets such as your house, car, personal saving etc..
If your company is formed as an LLC or INC they will go after the corporation and your personal assets will be protected.
I'm fully aware of that aspect, but given the way my business works the chances of that happening are extremely limited. I'm only curious to see if there is a benefit from a business credit perspective.
well its related
if a business defaults on its loans and creditors sue to recover it, they can only possibly seize what the business has, and not sue you and garnish your personal wages and property
Not relevant in my situation since my business does not have any loans/lines of credit other than the credit cards. I had to personally guarantee the credit cards anyway, so I would be personally liable on those in event of default regardless.