Business Trusts vs. LLC or Corps

Benefits of Operating as a Business Trust

Are you now ready to formally organize your business? You have several choices and many people think about a corporation or LLC. But there’s a better alternative, the Business Trust. You get most, if not all of the tax benefits of a corporation and liability protections of an LLC. You avoid the hassle of government fees and filings plus get privacy for your organization.

Reduced Personal Liability Risk

Business Trust: Yes! This is an enormous benefit. Any business enterprise operated as a business trust is legally isolated from your personal assets. Therefore, you are not personally responsible for liabilities of the business trust. You and your other personal assets are shielded, as liability is contained within the business trust.

  • LLC & Corps— Sort of.
    Read More

    Personal liability is limited per state regulations and code. However, these government sanctioned entities must remain in compliance with annual secretary of state filings and fees. Any omissions can invalidate statutory protections and leave your personal assets exposed to liability.

Personal Asset Safety

Business Trust: Yes! Business assets are totally private, and legally isolated from your personal assets.

  • LLC & Corps — Yes, but...
    Read More

    Unless you comply with all LLC/Corp secretary of state formalities, your other personal assets are at risk.

Privacy of Ownership and Organization

Business Trust: Yes! There’s no public record of your personal name, address, Trustees, or of the business trust itself.

  • LLC & Corps — No, Sorry
    Read More

    Corporations and LLCs are listed in the secretary of state database, and in each state they register. Directors and Officers full name and address is required per CA regulations.

Simple to Establish

Business Trust: Yes! Your Business trust is simple to setup.

  • LLC & Corps — Not really.
    Read More

    Somewhat complex because of name reservation, government filing fees, reporting requirements, application approvals, waiting periods and often delays.

Operates in All 50 States

Business Trust: Yes! You can immediately conduct business in all 50 states.

  • LLC & Corps — Yes, but...
    Read More

    You need to register with the Secretary of State and maintain a Resident Agent in each state.

Zero Statutory Setup Fees

Business Trust: Yes! Business Trusts pay zero setup fees to the Secretary of State.

  • LLC & Corps — No, sorry.
    Read More

    Corps and LLCs must pay setup fees to the Secretary of State before than can legally conduct business.

Zero Statutory Annual Fees

Business Trust: Yes! There are no annual fees paid to the Secretary of State

  • LLC & Corps — No, sorry.
    Read More

    Corps and LLCs must pay fees annually or biennially to Secretary of State.

Streamlined Reporting

Business Trust: Yes! There’s no required reporting or filing with Secretary of State!

  • LLC & Corps — No, sorry.
    Read More

    Corps and LLCs must meet all reporting and filing requirements with Secretary of State.

Tax Filing Options

Business Trust: Yes! You may select Partnership, Trust or Corporation tax classification.

  • LLC & Corps — Yes, but...
    Read More

    LLC: Yes, select Partnership, Corporate or Personal filing. Corps: Only Corporate.

Swift Setup

Business Trust: Yes! Your Business trust only takes a week to setup.

  • LLC & Corps — Not really.
    Read More

    Somewhat long because of name reservation, government filing fees, reporting requirements, waiting periods and often delays. Generally, it takes a month to complete everything.

Financial Flexibility

Business Trust: Yes! Your organization can make distributions or withhold them anytime.

  • LLCs and Corps - Yes, but...
    Read More

    Corporations can only distribute dividends. LLC makes distributions based upon initial agreement.