S-Corporation or an LLC?

One of the most commonly asked questions is whether someone should form a corporation or an LLC. You can find all kinds of advice online, but nothing substitutes from a dialog with a business law attorney that has experience and your best interests in mind.

S-Corp

Liability Protection
Pass Through Taxation
Shareholder Draws are not subject to payroll taxes
Draws must be pro-rata to ownership
Only one class of stock
All owners must be US Citizens
No more than 100 owners
Potential negative tax consequences on sale of real estate owned by a corporation
and more pro’s and con’s…

LLC

Liability Protection
Pass Through Taxation
Gross Receipts Fee based on revenue not profit. See: FTB
Few formalities and no required meetings or minutes
Flexibility in how to pay owners
and more pro’s and con’s…

Closely-Held S-Corp

If your business will have less than 35 owners and meets all the requirements for an S-Corp then you can elect to be Closely-Held. This election allows you, upon written agreement, to forgo annual meetings and minutes without adding personal liability.

Ask for more info on this election for small business owners!

See process of entity formation Or Schedule Free Consultation

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