State of the Small Business: Two out of Three Businesses Formed with CorpNet.com Opt for the LLC

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To date, CorpNet.com has helped form tens of thousands of businesses; two-thirds of these businesses selected the Limited Liability Company (LLC).

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Time and time again we hear small businesses say that they’re looking for a more formal business structure than the sole proprietorship, but they don’t want to be overwhelmed by paperwork and administrative burdens.

CorpNet.com, a leading online incorporation service that helps entrepreneurs start their businesses, announced that it has formed over 10,000 businesses since its launch in July 2009. Approximately, two-thirds of those businesses were formed as a Limited Liability Company (LLC).

“We were not surprised to see such a high preference for the LLC among our customers. Time and time again we hear small businesses say that they’re looking for a more formal business structure than the sole proprietorship, but they don’t want to be overwhelmed by paperwork and administrative burdens,” said Nellie Akalp, CorpNet.com’s co-founder and CEO.

While the LLC is a relatively new business structure (it has become mainstream only in the past two decades), it is growing in popularity among small businesses. Owners of an LLC enjoy limited liability protection, ease of transfer of ownership shares, pass-through treatment of income to the owners for tax reporting purposes, and a less administrative burden than faced by owners of a corporation. For example, an LLC is not required to have a board of directors or officers.

The high preference for the LLC among CorpNet.com customers parallels findings from a 2011 report from the U.S. Small Business Administration (SBA). According to the report, 35.76 percent of newly established firms chose the simplest legal structure, the sole proprietorship, followed by 30.5 percent who chose to organize as an LLC. S-Corporations accounted for 20.14 percent of the start-ups surveyed, while C Corporations accounted for only 7.94 percent.

In addition, the SBA study found that those firms which initially organized as LLCs or
S Corporations were less likely to change their legal structure during their first four years in business than other business structures.

CorpNet.com provides business filings such as incorporating a business or forming an LLC, filing a DBA/Fictitious Business Name, Foreign Qualification filings and more. Although a small company competing against large giants in a crowded marketplace, CorpNet.com has made a name for itself for its personal touch, fast and reliable services, and flexible packaging options that meet the needs and budgets of any entrepreneur and business.

“As a small business ourselves, we understand the challenges and opportunities facing today’s small business. We’re proud that we’ve helped more than 10,000 businesses form in just a few short years since we launched CorpNet.com, particularly as we’re veterans in the industry, but coming back as the new kid on the block,” said Akalp.

About CorpNet.com
CorpNet.com is an online incorporation service that helps entrepreneurs get their business off the ground in a fast, reliable, and affordable manner. Through its website, CorpNet.com provides business filing services required for a variety of business needs such as: forming a Corporation or Limited Liability Company (LLC), filing for a DBA, Doing Business in Multiple States (Foreign Qualifications), Closing a Business (Dissolutions), Registered Agent Representations, Trademark Search and Registrations, and Corporate Compliance services and supplies for all 50 states.

Founded by experienced entrepreneurs Philip and Nellie Akalp, CorpNet.com is a private company based in Westlake Village, CA. For more information, please visit http://www.corpnet.com or follow @CorpNet on Twitter.

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Allison Bethurem, PR/Marketing Manager
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