May 28, 2018

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What are the Main Differences between an LLC and an S-Corp?

What Is a C-Corporation?

What Is an LLC?

What Is an S-Corp?

Which Type of Company Incorporation is Right for You?


Top Consumer Reviews Articles provides unique articles that you won't find anywhere else on the internet. These articles are designed to help you make the most informed decisions possible.

What are the Main Differences between an LLC and an S-Corp?

Perhaps you've already decided to shift out of sole proprietorship or general partnership status. Friends, acquaintances or (bitter?) experience itself might have alerted you to the personal financial risks of sole proprietor or partnership status in business. Advice might come from all directions: From well-meaning friends, acquaintances, other business owners, even relatives...with no business background! The limited liability corporation, or LLC, and the S-corp status may have been suggested to you by one or more interested parties. Thoroughly evaluating the pluses and minuses of the two types of structure is critical to making an intelligent decision.

So what are the main differences between an LLC and an S-Corp?

First of all, both structures are designed to limit personal liability relative to taxes and business debt.

An LLC, or limited liability corporation, is much more like a general partnership or sole proprietorship than a corporation. The owners declare the profits from the business on their own tax returns. No corporate return is required.

An S-Corp is a corporate structure that the Internal Revenue Service assigns a special status. "Subchapter S" status allows a corporation to avoid filing a corporate tax return, reporting instead any profits or losses on the personal return(s) of the owner(s). Otherwise, establishing an S-corporation means jumping through all the administrative hoops that federal, state and local governments require of C-corporations.

An S-Corp must be registered with state, and possibly, local authorities. Filing articles of incorporation and establishing by-laws are necessary steps. Shareholders have to elect a board of directors. Regular meetings must be calendared for both directors and shareholders, and minutes from these meetings must be recorded. In addition, like a C-corporation, an S-corporation must comply with any state or local business licensing requirements. Compliance with all these regulations usually means retaining legal counsel, something an LLC may not need to do to set up shop.

Neither the LLC nor the S-corp structure requires filing a business tax return. Both LLC owner-members and S-corp owners declare business income on their personal returns at tax-filing time.

As a distinction, S-corp owners are also shareholders, and shareholders who work for the company are required to pay themselves a salary that is in line with industry salaries for similar work. The owner pays income tax on that salary, but may or may not owe any taxes on the company's profits. On the other hand, LLC owners pay self-employment tax on 100 percent of the company's net income. Needless to say, this can create a burden.

Also on the downside for the latter structure, LLC means not only limited liability but limited life: If one of the owners dies -- or even goes bankrupt -- the LLC is automatically dissolved. This can be disruptive to business, especially for longstanding clients and employees. An S-corp, as a corporation, quite literally has a life of its own... legally speaking. The vicissitudes of mortality create no obstacle to the operation of an S-corp.

Taking a good, long look at the pros and cons of the S-corp and the LLC is crucial. Seeking legal advice on which structure best suits your circumstances is good practice.

The Swiss are using blockchain to refine their clunky business incorporation process

Here's a little-known fact: it's approximately as difficult and time-consuming to incorporate a business in Switzerland as it is in the Democratic Republic of the Congo. Swiss entrepreneurs face on average a six-week-long, paper-heavy process to legally ...

Published:  Thu, 24 May 2018 14:04:00 GMT

Head-mounted Display Market - Incorporation of Gesture Recognition to Boost Growth | Technavio

LONDON--(BUSINESS WIRE)--May 25, 2018--The is expected to grow at a CAGR of approximately 37% during the period 2018-2022, according to the latest market research report by . This press release features multimedia. View the full release here: https://www ...

Published:  Fri, 25 May 2018 09:35:00 GMT

Yearlong incorporation study kicks off in The Woodlands

The Woodlands Township leaders may decide by early next year whether to recommend that voters consider turning the community into a city, according to township board Chairman Gordy Bunch. Bunch wrote in an email that the two consulting groups are helping ...

Published:  Mon, 14 May 2018 05:51:00 GMT

CLPS Incorporation Announces Pricing of $10.5 Million Firm Commitment Initial Public Offering

Shares to Commence Trading on May 24, 2018 on the NASDAQ Capital Market as "CLPS" Shanghai, China, May 23, 2018 (GLOBE NEWSWIRE) -- CLPS Incorporation (the "Company"), a global leading information technology ("IT" ), consulting and solutions service ...

Published:  Thu, 24 May 2018 07:23:00 GMT

Amesbury's big weekend arrives with Incorporation Day, Memorial Day

AMESBURY - The city will mark the 350th anniversary of its incorporation Sunday and plenty of activities are planned in observance of both that day and Memorial Day this holiday weekend. Incorporation Day opening ceremonies will be held at City Hall ...

Published:  Sat, 26 May 2018 00:17:00 GMT

No incorporation necessary for referendum, says Justice Minister Jordan Brown

Justice Minister Jordan Brown says he doesn't anticipate that groups will be required to legally incorporate as a not-for-profit in order to become an advertiser for the upcoming referendum. MLA Hannah Bell had raised the issue during Wednesday's ...

Published:  Fri, 25 May 2018 05:58:00 GMT

Buy Infibeam Incorporation; target of Rs 259: KR Choksey

Unicommerce is an e-commerce enabler and provides a range of cloud-based solutions for managing the supply chain process: Multichannel Order & Inventory Management, Omnichannel Retailing and Warehouse & Logistics Management. The company is running a SaaS ...

Published:  Mon, 21 May 2018 04:46:00 GMT

LINE Corporation Establishes New Subsidiary by Company Split (Simplified Incorporation-Type Company Split)

TOKYO--(BUSINESS WIRE)--May 25, 2018--LINE Corporation (NYSE:LN) (TOKYO:3938) (Headquarters: Shinjuku-ku, Tokyo, Japan; Representative Director and CEO: Takeshi Idezawa; the "Company" ) announced that the Company has decided at the board of directors ...

Published:  Fri, 25 May 2018 20:37:00 GMT

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