Legal Question in Entertainment Law in California

Both an LLC and a closely held S corporation will provide you with protection from lawsuits. Both can be taxed as a partnership. That means there is no double taxation. All profit or loss is passed through to the owners of the shares after expenses are subtracted. You have the choice to pay yourself a salary or wait until the end of the year for your schedule K to receive the profit or loss. Either way, you will have a schedule K. Corporations tend to require more formalities and documentation than the LLC entity. Only a C corporation can sell shares to the public in an IPO. Both an LLC and an S corporation can have more than one member or shareholder. If you don't keep up your corporate minute book, it may be possible to "pierce your corporate viel", or if funds are intermingled. It is best to consult with a corporate attorney to make sure you are fully protected when forming a new entity.

By Deborah Barron

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http://www.lawbarron.net