But which legal form is right for your business?

And should you even incorporate at all?

Read on to find out.

Should You Incorporate?

When you’ve been doing business for a while, incorporating may seem like the logical next step.

But incorporation isn’t just a milestone to check off your list, it’ll also change the way you run your business and increase your business expenses. It makes sense to take a critical look at your business and carefully consider whether incorporation actually makes sense for you.

There are many advantages to incorporating. The most obvious is enhanced credibility for your brand. Incorporation also provides less glamorous, albeit more practical benefits, such as tax advantages and personal asset protection. The trade-off is enhanced scrutiny and the need to comply with federal and state legislation.

Corporation or LLC?

Both corporations and LLCs are separate legal entities, which enjoy certain advantages and legal protections. When you incorporate your business, it becomes a legal person in its own right. It can sue and be sued in its own name, and its assets and liabilities are completely separate from yours.

However, corporations and LLCs enjoy different benefits and protections under the law.

Corporations have significant tax advantages. It’s possible, for instance, to deduct a corporation’s business losses from your personal tax return, including startup costs. A corporation can also provide considerable savings on Social Security and Medicare taxes. That said, corporations must have a set management structure, and unless your business is a certain size, this may not be feasible.

LLCs offer the same major benefits as corporations, including safeguarding your personal assets, but don’t have the same extensive tax advantages. The flipside is that the management structure is more flexible. This makes an LLC a better choice if you own a small business.  Depending on your state, there may be a wide range of differences in fees for the LLC and the corporation.

Are you thinking of incorporating? Reach out to Bosserman Law at (662) 890-9558 for a consultation.

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What exactly is an LLC?

An LLC, or a limited liability corporation, is a specific type of business entity. LLCs are made up of members, or the owners, and have their own registered names, tax identification numbers and bank information. Members of LLCs are usually not legally responsible (hence the name) for any debts or liabilities incurred by the LLC itself. An LLC may be a sole proprietorship, partnership or corporation. This means they are taxed as a pass through entity.

What are the requirements to form an LLC in Mississippi?

It’s important to research the requirements for your specific state as they can vary. For LLCs in Mississippi, you must begin with registration. Members send a Certificate of Formation to the Secretary of State with the information requested and filing fees. The name of your business is important as well. It must include the letters “LLC” and be different from any other businesses on file in the state of Mississippi. Names are reserved with the Secretary of State.

A registered agent must then be appointed. Finally, LLCs must comply with tax and regulatory requirement as well as file annual reports.

Are there any benefits to forming an LLC?

One of the main benefits of forming an LLC is the ability to protect your own personal assets from any liabilities your business may incur. You also avoid double taxation as members report profits and losses on their own tax returns. Finally, forming an LLC may enhance the reputation of your company and add credibility.

How can I find out more information about forming an LLC in Mississippi or Tennessee?

For information personalized to your personal and business needs, reach out to us at Bosserman Law. We’ll be happy to help you determine the best solution for your business.

The post Asked and Answered: FAQs about LLC Formation in Mississippi appeared first on Kelly Bosserman Law.