March 23, 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.

PreveCeutical Announces Incorporation of Australian Subsidiary to Support Ongoing Research Programs

VANCOUVER, British Columbia, March 16, 2018 (GLOBE NEWSWIRE) -- via NetworkWire - PreveCeutical Medical Inc. (the "Company" or "PreveCeutical" ) (CSE:PREV) (PRVCF) (18H.F), announces the incorporation of its first Australian wholly-owned ...

Published:  Tue, 20 Mar 2018 05:46:00 GMT

State challenges Buffalo Chip incorporation

STURGIS - The state of South Dakota is challenging the incorporation of the town of Buffalo Chip. This comes after the city of Sturgis and area land owners had exhausted nearly all their legal options. Under state law, the state's first step in the ...

Published:  Fri, 16 Mar 2018 10:39:00 GMT

Hiring A Singapore Incorporation Services Can Help Foreign Entrepreneurs Avoid These Common Mistakes

Amongst all the countries in the Asian region, Singapore is currently the most preferred by foreign entrepreneurs to do business in. With its strategic location, business-friendly environment, state-of-the-art infrastructure, and unparalleled tax system ...

Published:  Thu, 15 Mar 2018 18:41:00 GMT

South Dakota to intervene in case of town's incorporation

STURGIS, S.D. (AP) - South Dakota is challenging the incorporation of a town on the western part of the state. The South Dakota Supreme Court said last week it will allow the state to intervene in the incorporation of Buffalo Chip, which is located ...

Published:  Mon, 19 Mar 2018 14:01:00 GMT

State to intervene in case of Buffalo Chip incorporation

STURGIS, S.D. (AP) - The state of South Dakota is challenging the incorporation of the town of Buffalo Chip. The Black Hills Pioneer reports the state has hired a private attorney to serve as a special assistant attorney general. The state Supreme Court ...

Published:  Mon, 19 Mar 2018 08:37:00 GMT

JR Ball: Disdain and disgust driving the St. George incorporation train

What does the second go-round of the St. George incorporation movement have in common with the disaster known as the Louisiana Special Session Both are rooted in disdain for the respective executive in charge and disgust for anyone who believes "tax and ...

Published:  Mon, 19 Mar 2018 13:38:00 GMT

Editorial: Incorporation-consolidation issue muddied by misinformation

The new mantra of Chatham County's unincorporated islands is quickly becoming a battle cry: No study equals no choice. Like the torch-and-pitchfork mobs of yesteryear, though, few residents fully - or even partially - understand the fight they are ...

Published:  Mon, 12 Mar 2018 01:19:00 GMT

The incorporation of Artificial Intelligence in Indian IT

Infosys Ltd says that Artificial Intelligence (AI) technologies "are already being broadly deployed, producing real results, and impacting business strategy" in at least 73% of companies across the globe. Along with other Indian IT companies, Infosys ...

Published:  Mon, 12 Mar 2018 14:37:00 GMT

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