Which is best for us: an LLC or incorporation?

My husband and I currently run a sole-proprietorship business. We're not sure what the best legal entity is for us. What should be consider?

If both you and your husband are owning (in addition to running) the business then yes, it's time you looked into a new business form.

Both LLCs and corporations will provide you with a limited liability "shield" to protect your personal assets. But the advantages and disadvantages of each form differ.

To make the choice that's right for you, you'll want to look at whether the two of you will be 50-50 owners, what kind of taxes you can expect to pay (depending on which entity you choose), your exit strategy for the business, what the out-of-pocket costs are for forming each entity (in some states, the difference is very great) and your personal financial/tax situation.

Sit down with an accountant and attorney to discuss the ins and outs of your particular situation so that you can make a choice you won't regret or have to undo at a later date.