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  1. #1
    Join Date
    Sep 2008
    Posts
    1

    Default LLC or Corp?

    My question involves business law in the state of: NY

    I'm starting a retail business and would like to form a business entity so that I am not required to provide a personal guarantee or credit. This would include the lease, merchant account, etc. Which would be best?

  2. #2
    Join Date
    Apr 2007
    Location
    Il.(near StL,Mo.)
    Posts
    5,252

    Default Re: LLC or Corp?

    If you want to form a business, you will need to talk to a business attorney in your state. They can answer all your questions.

  3. #3
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: LLC or Corp?

    That's up to your lender. They're going to be more interested in the assets and cash flow of the business than they are in the type of entity you formed.

  4. #4
    Join Date
    Jul 2007
    Location
    Florida
    Posts
    2,344

    Default Re: LLC or Corp?

    Regardless of entity type, the only way you will operate with creditors without a personal guarantee is if you 1) have an excellent D&B (Dunn & Bradstreet) rating, or 2) have significant assets to pledge.

    No bank will loan money to a new corporation or LLC with no track record or assets without a personal guarantee. Most corporate landlords will require it on a lease as well.

    More important considerations for your choice of entity type are:

    1. How many owners will there be?
    2. How do you want to limit your personal liabilities from operation of the business?
    3. How do you wish to be treated for income tax purposes?
    4. What level of complexity in the administration of the entity can you tolerate?

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