Posted by socialtalker on October 15, 2009 at 4:40pm
hello, I am building a community site that is mainly a newspaper. I am trying to decide whether to set this up as a c-corporation or an LLC, I was hoping someone on this group had some links they could recommend to sites where i can ask this kind of question. i wonder what most small news sites are under. thanks!
Comments
Depends...
Many things determine which corporate form is best, almost none of which are related to the fact you're starting a small news site.
Do you expect to have many investors, or just yourself/friends/family in small numbers?
Do you expect this company ever to invest in or purchase other companies?
Do you expect to run it yourself, have a few employees, contractors, or many?
I incorporated my small consulting firm as a subchapter-S corporation, which limits how many shareholders I can have in exchange for making the capital gains of the business taxable personally and reducing, somewhat, the paperwork requirements of a "regular" C-corp.
Even at that, the S-corp was overkill. I had only one employee but the corporate governance filing requirements, along with the payroll tax and liability paperwork, really dragged me down. A program like QuickBooks helps but it's still a ton of work. I wound up dissolving the S-corp and returning (for now) to a sole proprietorship. I may, later, establish an LLC if consulting gigs come back in force.
You might consider an LLC as a first step. It gives you liability protection while allowing the profits from the business to flow to you as personal income, greatly reducing the paperwork. If you decide you need a more formal corporate structure later, you can convert to S-corp or C-corp status. It is far easier to do that than to start as a corporation and try to "downgrade" to an LLC.
By the way, I handled both the S-corp formation and dissolution via LegalZoom.com, which did a fine job in both cases and earned my recommendation.
Good luck with your new venture!
Best regards,
Jay Small
-- Jay Small
http://smallinitiatives.com/contact-jay-small/
excellent response!
thanks so much for the tips! i dont ever remember reading about the ease of converting up from an llc. I went ahead and chose the llc. now all i have to work on is the operating agreement, thanks again.