ForumsLegal and Insurance

There are no benefits to double-taxation. But the double-taxation issue can be avoided if you file an S-election, which in effect converts the corporation for tax purposes into an S corporation. However, not all corporations are eligible to make an S election, so if you are considering this option you should discuss with your attorney or tax accountant. There are some benefits to using a corporation -- they are easy to form and maintain, the capital structure is very simple, and the formation costs are generally very low (in most instances less than forming an LLC). An LLC on the other hand, provides better flexibility for capital and management structure, which makes it an ideal form if you plan to take on angel investors who usually will want specifically negotiated management rights and liquidation preferences. Really the best form for you will depend on your situation so you should consult with your attorney and tax accountant. You should not try to make the decision yourself -- it could end up costing you a lot of money in the end.