LLC vs. a C-Corp... Liability concerns (3 questions)?

LLC vs. a C-Corp... three different questions. which best minimizes liability? which is best reduces tax exposure? which is ideal if you are going to use as an umbrella for various business engagements (e.g., consulting practice, ecommerce business, real estate investment group)? Please note that I am "not" asking for the "definitions" of each. I would prefer if someone would answer the questions I've posed vs. telling me to speak to a professional. I can figure that out myself and intend to do so but seek input from the Yahoo! community to be better informed. Thank you

Public Comments

1. Well you're in luck because both an LLC and a C Corp can minimize your liability and your tax exposure. As far as using an entity as an umbrella, this is usually not a good idea. You don't want unnecessary risk exposure and doing several different activities under one company can do exactly that. You should keep each activity separate; and sometimes that means forming multiple activities. Any good lawyer will tell you to keep your business activities separate because a lawsuit under one activity; example: consulting, may put your entire company (which is also engaged in real estate investing) at risk. Keep all activities separate. Both an LLC and a C Corp, if all rules and guidelines are followed correctly, will shield you from your business liabilities. Neither will save you if you are grossly negligent or doing fraudulent activities---not saying you are or will. The nice aspect of an LLC is that you can choose how it will be taxed under federal law. An LLC can be taxed as a sole proprietorship, which is default if there is only one member, a corporation; C or S or a partnership. If you are starting out as a one man show and you have potential risk exposure, you may want to consider forming an LLC and file your taxes as a sole proprietorship. It will not give you tax savings but your personal assets will be safe from business activities, if you follow the guidelines. I know you hate to hear this, but the rules of liability exposure, the fact that it can be covered by the "corporate veil", tax advantages and disadvantages and everything else there is to discuss on this topic could be discussed for several hours. I strongly recommend that you sit down with a lawyer and a tax professional before you start one of these entities. You won't regret it. Yes, I did read your post, but I would be doing you a disservice if I did not mention that. Hope that helps.