Legal Question in Business Law in California

This is sort of like trying to answer " I need a car, what is the difference between a Ford and a Chevy, and which is better for my needs?" Each has some minor advantages and drawbacks that generally make little difference to the average small business. If you have a nonresident alien co-owner, an LLC is better. If you have a high sales volume, low-markup business, a corporation may be better from a franchise tax basis. LLCs may be preferable for companies expecting large capital losses in the formative years. And so on.

I recommend giving yourselves a crash course in how to start and run a small business. There are several very good paperbacks on this subject, and in addition to discussing when to incorporate and when to form an LLC, they cover essential topics like how to get a taxpayer ID number, when and how to publish and file a fictitious business name statement, basic business bookkeeping, and so on.

Starting and running a business does require at least some basic business organizational and operational know-how, as well as knowing how to make and sell your product or service. And, when the time comes, feel free to contact me for quick, low-cost setup of your business entity, whether it be LLC or Inc.

As a Franchise Attorney I can add some business advice. Before going to the trouble and expense of forming either an LLC or a Corp., why don't you just operate as a sole proprietorship for a time. That way you can see if your online business idea makes sense and is viable. Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation

Here's a short blog post I wrote on some of the basic differences and similarities between corporations and LLCs:

http://ocbusinessentertainmentlaw.blogspot.com/2010/08/corporation-or-llc.html

Consult with your accountant and a good business attorney in order to tailor something to your unique situation.