1) You recommend an LLC, as it provides the liability protection and personal capital benefit without the double taxation of a C-corp. My CPA told me an LLC filing fee based upon the calendar year total gross amount, but the taxation is always based upon the total profit and loss, right?
With an LLC, (as well as S-Corps, partnerships
and sole proprietorship) you have what's called pass-through taxation ... meaning that the company doesn't actually pay any income tax. It's passed-through to the person, the owner. So yes, you have it; the income (OR loss) flows through to line 12 on the individual's 1040 tax return
(business income or loss)
2) What are the big differences between LLC, C-corp and S-corp? Why LLC provides more liability protection than Corp?
Actually ANY corporation provides that liability protection (C-Corps, S-corps AND that hybrid animal, the LLC) are looked by state law
(now this is corporation law, state law, nothing to do with taxes) as a separate legal entity. Lawsuits, creditors, etc. cannot come after your personal assets
for the liabilities of the corporation ... and the LLC? (the Limited liability Company) ... is actually a hybrid, that provides the liability protection of a corporation, with the flexibility of a partnership.
So the LLC, the S-Corp and the C-corp ALL provide that same liability protection ... where as the partnership and the sole proprietorship are essentially the people ... no corporate veil, as they say, no liability protection.
Now, TAXATION is a whole different issue. Sole proprietorships, partnerships and LLCs (that don't ELECT to be taxed as a C-Corp) are, again pass throughs... the profit and loss simply flow through to the owner(s), whether the take the money out of the company or not.
Only C-Corps and IRRevocable trusts pay their own taxes (at corporate and trust tax rates
, respectively), so the decision about taxation is really a different decision from the one about liability protection ... one is a tax law (both federal
and state) and the liability protection issue is a state law (how do I set up - incorporate or not -my business) issue.
3) After I get a new EIN under Inc., will I able to change from Inc. to LLC or close the Inc. to apply filing a new LLC? Need to get another new EIN for LLC or use the same one before from Inc. EIN?
you can originally set up as one of the following:
Limited Liability Company
Limited Liability Partnership
THEN, next you can elect how you want to be taxed.... and that's a state department of revenue
and federal (IRS
Generally you can set up as a Corporation OR LLC and then elect with IRS to be taxed as an S-Corp (a pass through, but still a corporation) OR a c-Corp (a separate taxable entity, and still a state corporation)
Hope this helps