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What is the difference between an LLC and INC?

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3 answers

Hello Jasmyn,

I see from your profile that your are in the process of founding and registering a small business. I assume in your question that by your use of the term "Inc." you mean corporation or "incorporating" and you wish to know how those terms differ from LLC (Limited Liability Company). Registering a business in your state and then with the IRS requires that you complete an application for articles of incorporation with Florida and once you have those, registration with the IRS. There are various forms of incorporation that you will see at the Florida :Secretary of State web site. The run the gamut from single person sole professorships to partnerships, stock corporations and others. Limited Liability Companies are also a form of incorporation and considering your profile, probably your best choice. You can set up an LLC yourself on-line. It will separate your personal assets from your company assets and protect them. When you sell a product or services and begin generating revenue an LLC has many tax advantages. You can register it as Sub Chapter 'S' for tax purposes and pass the revenue and the expenses through to your personal tax returns, paying no taxes as a company. You thus avoid the double taxation issue prevalent with many of the other types of incorporation. An LLC limits your personal liability for debt and some court judgments that may not fall in your favor. A sole proprietorship does not offer such protection. Representing yourself as a company allows you to pursue financing as an enterprise. I am sure you can think of a creative name for your LLC and you can complete the articles of incorporation necessary to bring your enterprise into existence. The term, "LLC" must conclude the name of your company if you decide to form such an organization. You must also register federally with the IRS. You will receive state and federal tax and employer identification numbers by registering your business.

You can download free instructions on forming an LLC in Florida from the web site I maintain as an extension of my volunteer work. Your profile also indicates a concern about intellectual property and NDA's. Please see the "References" cube in the right margin of my web site to download the free LLC instructions and NDA templates for your you use. The site is: *https://www.smalltofeds.com *

Best wishes with your registration and planning!

Ken

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Please change the word, "professorships" in my original reply to "proprietorships..

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Thank you so much, Ken! Your answer has been extremely helpful.

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