Hello and welcome to start our voice with ena FM. Today, we're going to talk about incorporation basics. Should you incorporate and be a corporation, or should you form a limited liability company, also known as an LLC? I know in the early stages, this is a question that comes up often for startup errs. They don't want to make a mistake, they want to go with the right form of entity, and there are a ton of resources online that are pretty difficult to decipher. So, I'm gonna give a five-minute overview, but I can skip ahead and give you the answer in case you don't have five minutes. If you're gonna be a startup and you're gonna be looking for funding, you're gonna have a stock option plan to incentivize your employees, go with a C-corporation and don't worry about form of entity. Now let's get more in-depth into the topic. Why would you want to be an LLC? An LLC is a form of entity that works well if you're gonna be on your own for a little while. It allows for pass-through taxation, which means that if you're investing your own money into the business and you have other sources of income, you'll be able to write off the losses from the startup against this other income, and this will result in tax savings for you. Typically, that is not the situation that startups are in. Even if they're investing their own money, they will frequently not expect to do that for a very long time. If we're talking less than a year, it probably doesn't make sense. If we're talking two to three years, that's when an LLC might actually make sense. Now, why does an LLC work if you're gonna take investment? Well, if your investor...
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