S Corp Vs. LLC

Meet Jessica,

Jessica is starting a business in NY selling shea butter and trying to decide whether to form a LLC or a S Corp. Here’s what she should know.

  • Both an LLC and S Corp protect an owner’s personal assets from business liabilities and debts.
  • Both an LLC and S Corp pay self-employment taxes and no corporate taxes. S Corp owners do have to take a reasonable salary which IS taxable.
  • Unlike an LLC which can have any amount of members, S Corp can only have a max of 100 shareholder and they all must be US Citizens.

Though S Corp formation has more paperwork an LLC in NY has a publication requirement

Leave a Reply

Your email address will not be published. Required fields are marked *