Q: Which type of company has the highest legal protection against lawsuits, INC or LLC?
I'm having hard time understanding the legal protection advantage of an INC vs LLC after reading tons of articles and asking two accountants, I still don't have an accurate information regarding the liability of each type of company.
I want to know which type of company has the most legal protection against lawsuits? If someone sues the company (LLC and INC) which one has the highest protection? Some sources are saying they have the same protection and some said INC has better protection against lawsuits.
We are 3 owners and we will definitely get an insurance after forming the business, it's an online retail for beauty products, that is why in the first stage we want to know which type of business has the highest protection against lawsuits.
A: The problem is that each entity has both advantages and disadvantages, and you have to decide which one is best for you. That can take some time, and may depend on the goal of the business. Since you want an entity to run a business involving online beauty products, you might want an LLC over a corporation since internet law is a big deal these days, and there are more and more cases involving internet disputes. The most important thing you must first decide is how to fund the entity, whichever one you choose; and how the 3 owners are going to divide the profits; and who is going to have cotrol. Only you can sort out these answers. Corporations used to rule, but since LLCs have been around a long time now, there is probably an equal amount of cases on both entities. And, the newer cases would probably be cases involving LLCs. Good Luck.
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