Deciding on the perfect entity for your Delaware based company can in fact be really confusing, but this process is really significant. It is really significant that you understand the differentiation between a Delaware LLC and corporation because these two are the most popular business entity structures.
LLC just stands for Limited Liability Company; it is even one among the most renowned business entities in the past few years. However, you must understand that just for the reason that it is well known doesn't suggest that it is the best option for your type of business. You should evaluate a list of merits and demerits of this type of business structure before you decide. Even though a Delaware LLC is really much like the traditional corporation in that both business structures will offer its owners safety from being held individually accountable for company debts and judgements.
LLCs are also popular for their flexible management structure. As an LLC is operated by the members, it doesn't have the strict demands of conducting shareholder meetings, taking minutes of the meetings and following bylaws such as the traditional corporation, which merely means less hassles and less paperwork. With an LLC, there is also a flexible distribution of the company's losses and profits, not necessarily distributed in accordance to the % of ownership.
Different from the traditional company corporations that have been around forever, LLCs are quite new and haven't been completely tested with the US court system, so it is really hard to actually say just how well LLC's will hold up in the years to come. A member of LLC will definitely be treated as a sole proprietor when the tax season arrives. Different from a corporation, an LLC will even not be able to gain from corporate tax treatment which may lead to a tax savings.
A limited company corporation structure even offers safety for all its owners from being held in charge for company debts and judgements. Limited company corporations have withstood the test of time. This particular business structure has been around for so many years and has being tried in the court systems and has justly proven its liability protection. The corporate structure also offers staff and officers fringe benefits that are just not made available to the founders of so many other kinds of business structures. Everybody understands that corporate taxes are usually lower than individual tax rates and can even carry corporate losses forward up to several years.