Incorporate your business with Novo and LegalZoom

Why form a business entity?

Protect your personal assets

Personal liability protection for your assets.

Minimize risk

Work with two brands you know and trust.

Optimize for tax time

Tax advantages for LLCs and corporations.

Gain credibility

Appear more professional within your industry.

Frequently asked questions

Why should I form an LLC?

The main benefit that LLCs provide for small business owners is asset protection. With an LLC, your personal assets can be protected from debts and lawsuits against the business. This protection is not provided when you run your business as a sole proprietorship.

What's the difference between an LLC and a corporation?

Ownership is the main difference between LLCs and corporations. Where LLCs are owned by one or more individuals, corporations are owned by its shareholders. If you're deciding to form an LLC or corporation based on limited liability protection, you should know that LLCs and corporations offer this protection for your personal assets.

Typically, LLCs are easier to start and maintain, but, if you're looking for investment from outside investors, forming a corporation might be your best bet.

What's the difference between a C corporation and an S corporation?

In short, the main difference is how your business incomes are taxed.

For C corps, your income is taxed on the business's net income and then again when the shareholders pay taxes on the profits they receive. For S corps, net income is not taxed and only shareholders are responsible for paying taxes on the profits they received. Even though they are taxed twice, there are clear ownership and tax rate benefits to forming a C corp instead of an S corp.

What's the difference between a sole proprietorship and an LLC?

Personal liability protection, which you can tell from what LLC stands for, "limited liability company." As the owner of an LLC, you aren't personally responsible for business liabilities or debts, which means that, in the event that you cannot pay your debts, your personal assets are not liable for seizure to pay off those debts.

How are different business types taxed?

Sole proprietorships, LLCs, and S corporations are only taxed once on profits received. C corporations, however, are taxed twice. The business is responsible for paying taxes on the corporate income AND the shareholders must pay taxes on profits received. If you form a non-profit and have 501(c)(3) status, your non-profit is exempt from federal income taxes.

Which business types give me personal liability protection?

LLCs, corporations, and nonprofits. Sole proprietorships and DBAs are not covered with limited liability protection.

Upgrade your business with Novo and LegalZoom

Why form a business entity?

Protect your personal assets

Minimize risk

Optimize for tax time

Gain credibility

Frequently asked questions

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