As a single person consultant, should I incorporate? If so, as an LLC, C-Corp, S-Corp, other? Thx
Seattle, WA
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Posted 8 months ago in Corporate / Incorporation
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I hope to have several clients and work both from my home office as well as within my client's offices. Depending on growth, I may hire other employees or contractors
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Answers (1)Stuart Alan Heller
This attorney is licensed in Washington.
Posted 8 months ago.
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If you will be making agreements with other parties who are willing to contract with your business entity rather than you personally then you would be better off forming some form of limited liability business entity. An LLC or for profit corporation will provide the same amount of protection. A C corporation and an S corporation are the same thing provided all the shareholders are US citizens and there are less than 35 of them. An S corporation is generally taxed like a partnership (which itself pays no federal income tax and all of its income and loss pass through and must be shown on the owners' personal tax returns) and it achieves that by filing an election form with the IRS. Nowadays corporations can be taxed like an LLC and an LLC can be taxed like a corporation so it doesn't make too much difference; it all depends upon an election made with the IRS. Both require a minimal amount of annual paperwork in order to keep the Secretary of State from administratively dissolving the business entity. Generally a limited liability company is more flexible and requires less paperwork than a corporation as it is not required to have bylaws or to hold annual meetings or take minutes at such meetings. The Washington State registration fee for either type of business entity is less than $200 and the annual fee charged by the Department of Licensing is $59. You may want to talk to your accountant to see if he or she has a preferences for the type of your business entity. Based on the little I know about your operation I would recommend a limited liability company.
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