what is the difference between LLC band S corp?

Answer 1

S Corporation is commonly used by small business proprietors, the S Corporation pays no corporate taxes, but instead passes profits and losses directly to its owners (the stockholders) who declare such profits and losses as part of their personal taxable income. In this manner S Corporations resemble partnerships, although some subtle differences in taxation exist. As a result, S Corporations do not become subject to the "double-taxation" that C Corporations enjoy. However, not all corporations qualify for S Corporation treatment.

A limited liability company, typically referred to as an LLC, is one of the four general ways you can choose to organize your business (the other three being as a sole proprietorship, as a partnership or as a corporation). LLCs are a newer type of business entity, as most states did not have laws recognizing the LLC form until the 1980’s. Over the last few decades, however, LLCs have become very popular due to the fact that they combine some of the most attractive features of both partnerships and corporations. Specifically, LLCs afford their owners the same type of limited liability associated with corporations, meaning that LLC owners are not generally personally liable for the business’ debts and losses. However, compared to corporations, LLCs are relatively easy to set up and the LLC form provides more flexibility than the corporate form - in this regard, LLCs are more akin to partnerships.

Answer 2

Differences are mostly technical. The only big one is that S corporations pay taxes as if they were partnerships, while LLCs have a choice of paying taxes as a partnership or as a corporation, and the IRS may in certain cases require one or the other.