All of these posts were relevant and useful.  I decided to incorporate my real estate venture and operate it like a holding company.  That way it's easier for me to shift focus when the market dictates a need to change.  Also, I can pay my shareholders an annual dividend whenever my company makes money from the sell of our properties.  As the majority shareholder in a corporation I can influence how much of profits will go towards dividends.  I think this is a better way to control disgruntled partners.

C-CORPORATION vs S-CORPORATION vs LLC DIFFERENCE BETWEEN S-CORPORATION & LLC While the S corporation's special tax status eliminates double taxation, it lacks the flexibility of an LLC in allocating income to the owners. An LLC may offer several classes of membership interests while an ‘S’ corporation may only have one class of stock. Any number of individuals or entities may own interests in an LLC. However, ownership interest in an ‘S’ corporation is limited to no more than 100 shareholders. Also, ‘S’ corporations cannot be owned by ‘C’ corporations, other S corporations, many trusts, LLCs, partnerships, or nonresident aliens. Also, LLCs are allowed to have subsidiaries without restriction. DIFFERENCE BETWEEN CORPORATION & LLC There are many important differences between the corporation and LLC. The entities are taxed differently. An LLC is a pass-through tax entity. This means that the income to the entity is not taxed at the entity level; however, the entity does complete a tax return. The income or loss as shown on this return is 'passed through' the business entity to the individual shareholders or interest holders, and is reported on their individual tax returns. With a standard corporation, the corporation is a separately taxable entity. Corporations are treated as a separate legal taxable entity for income tax purposes. Therefore, corporations pay tax on their earnings. If corporate earnings are distributed to shareholders in the form of dividends, the corporation does not receive the reasonable business expense deduction, and dividend income is taxed as regular income to the shareholders. LLC's are less rigid in their structure than corporations, so you have more flexibility in adapting the LLC to your unique business. The Operating Agreement of a LLC can be structured in a limitless amount of ways. Formality : A corporation is a formal entity with officers and directors (at least one of each) required. A LLC, on the other hand, can be 'member managed' and run in a less formal way. For small, start-up businesses, less formality means you can focus on making money rather than administrative work. DIFFERENCE BETWEEN S-CORPORATION & C-CORPORATION All corporations start as 'C' corporations and are required to pay income tax on taxable income generated by the corporation. A C corporation becomes a S corporation by completing and filing federal form 2553 with the IRS. An S corporation's net income or loss is 'passed-through' to the shareholders and are included in their personal tax returns. Because income is NOT taxed at the corporate level, there is no double taxation as with C corporations. Subchapter S corporations, as they are also called, are restricted to having no more than 100 shareholders. YOU CAN CONTACT ME BACK ON OWNER@REALCORPORATIONFORSALE.COM IF YOU HAVE ANY MORE QUESTION. Message Edited by ChristineL on 11-18-2009 10:39 AM

Hi Jecrum - Here are some resources to help you determine what type of business entity you would like to establish. There are varying risks, paperwork, and taxes associated with different entities, but the most common are featured on our Business Incorporation page. Please let us know if you find these resources helpful!

I would probably use your standard LLC with this particular business. I would use the link the admin gave you above also. I have used that website numerous times and it really can teach you a great deal about business structuring.

To anyone reading this... be very careful with this.  At least here in the state of Florida, a LLC will definitely not protect your personal assets (they call it 'piercing the veil'--google it).  And if you do go this route, at least look at getting a personal liability umbrella policy from your insurance agent.  A $1 million policy is probably between $350-$500/year and well worth it to protect you and your family.  This way if you are sued and the attorneys 'pierce the veil' and come after your assets, you at have protection.  Good day.

Thats the other thing that is so important here and that honestly the structure of the business entity can be misleading at times. At all times however make sure that you have your correct levl of insurance in place at all times.   Message Edited by belluf on 11-02-2009 06:21 PM

jecrum, I hope you found these replies helpful. If you do consider obtaining legal represenation, here is a resource for you: Need A Lawyer? How to Find Legal Represenation for Your Small Business Message Edited by NicoleD on 11-19-2009 02:09 PM