Are corporations expensive?
by Jack W. Hope

A limited liability company, also known as a corporation, is more expensive to set up than a simple sole proprietorship or partnership.  Between legal fees and government and other costs one can expect to spend more than a $1,000.00 to set up a simple corporation.  In addition, it will cost several hundred dollars per year to maintain corporate status and file the necessary legal documents on an annual basis.  Additional accounting fees can also be expected as a corporation must file its own separate tax returns and its bookkeeping records are more complicated than the records would be for a simple sole proprietorship or partnership.   While it is generally true that one will pay less income taxes if a successful business is structured as a corporation, it may be that a business that does not yet have a significant income will pay greater income taxes as a corporation than if it was set up as a simple sole proprietorship or partnership.

To contact the author, please email jhope@smhilaw.com

The information contained in this message is general and should not substitute for the advice and counsel of a licensed lawyer.