Are Corporations Too Old Fashioned?

We talk a lot about using LLCs these days, so much so that people ask us, “Why use a Corporation at all, if LLCs can do it all and more?” Is there a place for Corporations still?

I think the answer is definitely “yes.” I can think of several occasions where I will reach for Corporation Articles, instead of LLC formation documents.

The company intends to go public. Securities laws in the United States (and most other places) have one thing in common: public companies need to be able to easily transfer ownership of shares from one owner to another. But most LLCs have transfer restrictions built into them, and S Corporations have restrictions on both the number of owners as well as the location of those owners. There’s really no substitute for a C Corporation if part of your exit strategy is going public.

International Ownership. LLCs, partnerships and S Corporations all have special tax treatment that is specifically designed for...

Megan Hughes is owner and founder of Business First Formations, an incorporation services firm in Reno, NV. Megan is a career paralegal and expert on business formation and asset protection, as well as the co-author of "Smart Business, Stupid Business."