Operating your business as a limited liability company (LLC) provides you with some of the best asset protection features of a corporation combined with operational and taxation features of a partnership (or a sole proprietorship if there is just one member). Like a Subchapter S corporation, an LLC can be subject to single income taxation (in contrast with a C corporation’s double taxation at both the corporate and shareholder level). Day-to-day operation and ownership of a LLC, however, tends to be easier because the formalities are less strict than those governing S corporations.

Of course, you should consult with your attorney and your accountant to discuss legal and tax issues before forming an LLC or changing the current legal form of your business.

About the Author

With an advanced international law degree from Georgetown University and more than 14 years of real world legal experience, Attorney Mike Young shows entrepreneurs how to protect and grow their businesses online. He's the author of "Internet Marketing Legal Secrets Revealed," "How to Create Your Own Internet Business Without a Lawyer for Under $175," and the creator of Website Legal Forms Generator^TM. Not just a lawyer who focuses exclusively on Internet and marketing law, Mike’s been working with computers for more than 27 years (his first computer was an Atari 400 with 8 KiB RAM) and started representing Internet businesses back in 1996.