I am starting small software company with little to no employees. I know this isnt considered 'legal' advice, but I have been leaning towards an LLC.. Just wanted another opinion about pros/cons. Thank you!
2006-09-12 12:52:36 · 2 answers · asked by The Auto Evaluator™ 7 in Business & Finance ➔ Small Business
Everything the person said above is true. However, you can also issue stock in the "S" corp whereas LLC has "members". The ability to issue stock might be an advantage to raise capital.
2006-09-16 10:22:19 · answer #1 · answered by Anonymous · 1⤊ 0⤋
You really should speak with your attorney about this decision. The primary difference is that the income or loss of the 'S' corporation 'flows through' to the shareholders, and therefore pays no income tax directly. If you anticipate losses in your first year or years, then you can deduct the Sub-S losses from your income in the current year, whereas in a LLC those losses are deducted from the LLC income in future years (maybe).
2006-09-13 13:27:04 · answer #2 · answered by Michael K 6 · 1⤊ 0⤋