Corporation formation
Form an Arizona LLC or S Corp
Anyone thinking of starting a business or anyone currently running a business as a sole proprietor should consider forming a limited liability company (’LLC”) or subchapter S corporation (”S Corp”). The main advantage of an LLC or S Corp is the liability protection afforded to the owners of the business. When operating as a LLC or S Corp, an owner’s liability is limited to his or her investment in the company; that is, the company’s assets and any capital contributed by an owner are all that are availabe to a creditor of the company in connection with any company debt or any company liability. However, the individual assets of the company’s owners will not be at risk.
For example, assume you are the owner of a carpet cleaning business and do not operate as a LLC or S Corp. If you accidentally ruin the carpet of a homeowner in the cleaning process, you would be personally liable for the damage and all of your personal assets would be up for grabs to satisfy the damage. Assuming, however, you operate as a LLC or S Corp, the owner’s remedy would be to pursue a claim against the LLC or S Corp as an entity and only the entity’s assets would be available to satisfy any liability.
Of course, any business owner should carry insurance in an amount sufficient to cover foreseeable risk. But in those instances where insurance does not provide coverage, or if the coverage is insufficient (in a case involving serious injury or death for example), the additional liability protection afforded by a LLC or S Corp should allow a business owner to sleep easier at night.
There may be additional advantages to forming a LLC or S Corp such as tax advantages and the appearance of a professional business operation.
Anyone considering forming a LLC or S Corp in Arizona can contact the Law Office of McCain & Bursh, PLC. Our company website is www.mccain-bursh.com.