Legal Question in Business Law in Pennsylvania

Legal formation of a business

For a private individual contemplating becoming a vendor for the Office of Vocational Rehabilitation in the state of Pennsylvania, what are the advantages and disadvantages of incorporating as a C corporation versus an LLC as it relates to tax issues and legal liabilities and which form offers the least taxation and the most legal protection against clients who for one reason or another might sue the vendor?


Asked on 11/14/00, 4:20 pm

1 Answer from Attorneys
Gerald Hershenson Law Office of Gerald M. Hershenson

Re: Legal formation of a business

This is a difficult question to answer without knowing your full financial situation. You have the option of making a subchapter S election if you incorporate. That will allow you to pass the losses and profits through your individual tax return and maintain the protection of a corporate entity. A C corporation may be taxed at a higher tax bracket and will file its own returns. A limited partnership will give you the protection you get for a corporation. However, I suggest you consult with your accountant to get advice as to which entity is best suited for you.

Gerald Hershenson

www.geraldhershenson.com

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Answered on 11/20/00, 8:49 am


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