What Are the Benefits of an LLC Vs. an S Corp?
If you own a business, you may have wondered what the difference is between forming a limited liability company (LLC) or an S Corp. The benefits of an LLC versus an S corp include greater flexibility in terms of business structure and profit distribution. Furthermore, S corporations must obey certain restrictions regarding size and ownership in order to keep its subchapter S status. Ownership There are very few restrictions on who may be a member of an LLC, as opposed to who is able to participate as a shareholder in an S corp. As explained on the IRS website, listed below in the Resources section, an LLC member may be another LLC, a person, partnerships, foreign entities and corporations. Shareholders of an S corp must be resident aliens or U.S. citizens. Furthermore, only certain trusts and estates are allowed to participate as a shareholder in an S corp. Size An LLC may operate with a single member or with an unlimited number of members. An S corp may have no more than 100 sharehold
