LLC vs. S Corporation
In this LLC vs S Corporation article, we will highlight advantages of the LLC and S Corporation along with some key differences between the LLC and S Corporation. Many businesses now utilize the LLC business structure along with the S Corporation tax classification. In other words, you can have the best of both worlds.
Shared Advantages
It is important to note that in a few cases, both LLCs and S Corporations share some of the same advantages:
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Personal Liability Protection: Both an LLC and an S Corporation keep the business separate from the owners, and give the owners personal liability protection for business debts, obligations, and legal disputes.
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Perpetual Existence: Both an LLC and an S Corporation can have “perpetual existence” that is, they typically last even after the owner or owners have passed away.
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Multiple Owners: Both can have one or more owners, although an S corp cannot have more than 100 owners.
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Credibility: Both give the owners of the business much more credibility in the day-to-day business with customers, vendors, and banks, since it appears the owners in both these business entities have more of an interest invested in their company.
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Pass Through Taxation: Both the LLC and S Corporation are pass-through entities (federal taxes are not levied on the entity…only its owners).
