Can you tell me the difference between the two? My husband is looking to start a company very soon and im trying to research for him.. it will be a power washing company.. only a few employees. Which one would be best? Thanks for any help!!
2007-08-06 04:57:56 · 4 answers · asked by Kristin 2 in Business & Finance ➔ Small Business
We live in Ohio if that helps
2007-08-06 05:25:54 · update #1
Both structures are good for small businesses because both offer the same limited liability protection, meaning that the owners are typically not personally responsible for the debts and liabilities of the business. Both are separate legal entities for state tax filing and both are typically pass-through tax entities. LLC's provide a lot more flexibility and Non-US residents can be members of LLCs, while S corporations may not have non-US residents as shareholders.
An S corporation’s existence is perpetual. Conversely, an LLC typically has a limited life span. An S corporation may also have advantages with self-employment taxes in comparison to the LLC.
If you're planning on owning the property that you're running your business on, you may want to consider having both an LLC and an S'Corp. The best thing to talk to an accountant or someone at your local chamber of commerce. Good luck.
2007-08-06 05:13:01 · answer #1 · answered by Mr B 3 · 0⤊ 0⤋
First, the regulations for LLC's can vary a little from state-to-state. At least, the ways the courts interpret the regulations for LLC's. Both are good, and obviously have pros/cons. One advantage of an s-corporation is that you can shelter quite a bit of retirement income. The best advice I can give is to find a good local CPA and get their recommendation. The CPA will asks lots of questions about what the goals of the business are, as well as financial goals of your husband ... questions that are too involved for a simple note here.
2007-08-06 12:04:11 · answer #2 · answered by jdkilp 7 · 0⤊ 0⤋
S corp refers to the income tax status, LLC refers to the legal status. you can have both, either, or neither -- they are independent choices.
state law controls whether LLC status or a regular corporation offers more legal protection.
S corp may or may not be available as a Federal tax choice -- see the discussion of personal service corps in the Fed regulations.
GL
2007-08-06 12:02:31 · answer #3 · answered by Spock (rhp) 7 · 0⤊ 1⤋
Your CPA will be the best advisor on this.... not a bunch of us muckety-mucks on the internet.
See your CPA. They wont steer you wrong..:O)...
2007-08-11 20:22:58 · answer #4 · answered by I Can Count To Potato 7 · 0⤊ 0⤋