On Feb 1, 2007, at 12:50 PM, Charlie Heath wrote: > My conclusion is that over time, an LLC probably costs a bit less > and has a > bit less paperwork to maintain for a simple software contracting > firm. Your > mileage may vary! Another thing to consider is that corporations are registered in a particular state, and conducting business in a state (the sort of thing that subjects you to taxes in that state) often requires a foreign corporation registration. For instance, it's far cheaper to register an LLC in Delaware than in Massachusetts, but if you want to conduct business as a corporate entity in Massachusetts -- doing things like renting office space or having a bank account in a Massachusetts bank -- you need to register that Delaware LLC as a foreign corporation in Massachusetts before you can do anything else. Larger companies, especially those with holdings in multiple states, can save enough through creative bookkeeping to make this sort of a setup worthwhile, but small companies generally don't. It's probably worth consulting an accountant and a small-business lawyer for details; better safe than sorry. As you note: > Caveat, though: if you ever really need the INC status, you'd > better have filed and maintained your records correctly. That's definitely the case; if you register the corporation yourself, and make a mistake or miss an important detail, you'll save a couple hundred in lawyers' fees, but you'll open yourself up to a lot more liability. I'm not sure how foreign corporation status would relate to someone who lives in Massachusetts but has clients in Connecticut, for instance, and that's the sort of thing I'd want to make sure was completely covered before I took on a Connecticut client. Charlton -- Charlton Wilbur cwilbur at chromatico.net