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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 110420
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Is there a benefit of changing a company entity from a LLC.

Customer Question

Is there a benefit of changing a company entity from a LLC. to a Inc when the founder in 100% share holder. And is one state better to file your corp than another.
Submitted: 6 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 6 years ago.
The C-corp pays taxes at a higher rate and is generally not the entity of choice for a 100% sole owner businsess. Additionally, not only does the C-corp pay taxes, you as the owner would pay taxes again on your earnings (this is known as the double taxation for corporations). The only advantage to a C-corp would be if you plan on selling shares to raise capital from investors. If you are not planning on selling shares, the LLC is the most convenient means. As far as places to incorporate, aside from CA which has very high taxes and a court ruled unconstitutional corporate tax scheme, most states have very little difference in their incorporation/LLC laws other than filing fees, which are also fairly close.

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Customer: replied 6 years ago.
Thank you for your time your answer was exactly what I need to know. Thanks again.
Expert:  Law Educator, Esq. replied 6 years ago.
Thank you.

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