Choosing a Legal Entity for Your Business: The Pros and Cons of S Corps and LLCs
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A publisher—small, medium, or large—should operate as a legal business entity for countless reasons. The most basic goal is limiting the owner’s liability for business operations to the owner’s investment in the business. After all, no one goes into business with the intent to put their house, car, and children’s college savings at risk.
Some publishing risks can be mitigated through general liability insurance and media-perils insurance, but creating a business entity such as an S corporation or an LLC serves several other purposes. Specifically, a properly constructed entity can help its owner or owners:
• raise capital
• plan for business succession
• promote retention of key employees
• control the owner’s tax liabilities
• create structuring opportunities for ownership of multiple business lines
• help the owner prepare for a sale of the business
Operating as an entity will create some additional reporting requirements, but the burden is often minimal and may have the benefit of forcing an owner to pay more attention to details.
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