If you are launching a new business or changing your structure, you are probably wondering if an LLC or an S-Corporation offers more benefits to you as a business owner. Let’s take a look at the similarities and differences LLCs and S-Corporations offer, to put things in better perspective.
LLC and S-Corp Similarities
LLCs and corporations have a number of similarities. Both offer debt and liability protection to business owners. The LLC or the S-Corp are considered legal entities which are separate from the business owner. Both an LLC and an S-Corp are considered pass-through tax entities. That is, no income taxes are paid at a business level, so any profits or losses are passed to the business owner’s tax returns. All taxes are paid at a personal level, though an LLC has the ability to opt out of pass-through status. LLCs and S-Corporations must follow the tax laws and registration requirements in the state