Ask Entrepreneur

What type of entity should I file as--a corporation or LLC?

I am starting my own business, Maid2Party.com. I am the creator and the owner. I have not registered with the IRS yet because I have no idea what type of entity I should categorize myself as. This business goes to other people's homes or businesses and supplies food, wait staff, cleaning people, etc. I can't seem to find anything online defining the categories I would fall under. Technically any "employee" I would need I could hire as independent contractors. The food part of the business could either be hired out or I prepare it.

You're wise to be asking about forming a separate entity for your new business.  The kind of business you're thinking of starting involves a lot of potential liability areas, from which you want to shield yourself.


But the corporation/LLC decision is like balancing the sides of a scale.  Do you want to have passive investors in your business?  Are you thinking of taking the business public?  What are the start-up costs in your state for the different forms?  Does one provide certain tax advanatages that the other doesn't?  Will you be looking for other active owners to join you?  How you answer each of those questions could tip the scale toward a corporation . . . or an LLC . . . or have equal effect.  Check out my article, "How to Choose the Business Structure That's Right For You," for a little more guidance.  But definitely speak to an attorney and an accountant in your area to review these issues and get the specific advice you need.

Share Your Thoughts

Today's Editor's Picks

About ASK ENTREPRENEUR

Ask Entrepreneur is a question-and-answer forum for and by the Entrepreneur.com community. Send in your burning business question, or comment on someone else's now. Have a Question? Ask Now

Topics (over 1000+ answers)

Ask Entrepreneur Q&A Hangouts

Google + Hangout With Shark Tank
Google + Hangout With Jason Falls
Google + Hangout With Angela Jia Kim
Google + Hangout With Grant Cardone

ASK Quick Tips