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I agree with BDS about the 'S' Corp. However, perhaps you need to go beyond the corporate status selection and get both accountants and partners together in one room. This 'difference of opinion' between partners advisors needs to be sorted out BEFORE you go any further. It could make for big trouble later on. Everyone needs to be on the same page here. You also need to decide WHO will be preparing the entities tax return, obviously both accountants cannot do it.

As an S-corp, your distributions will be based on the amount of each partners contribution. If you want the structure of an S-corp with the flexibility on an LLC, you can, depending on your state laws, form an LLC and then "check the box" to be taxed as an S-corp.

There are two questions actually being asked.

1) The Legal Entity Structure

2) The Tax structure

Legal Entity Structure
An LLC is a different legal entity than a corporation and has differnt features, some of which may be advantageous and/or other disadvantageous. As a result, you may want to seek legal advice and not tax advice in terms of which type of entity best meets the needs of the new company.

Tax Structure
As alluded to in another email, you can elect the tax treatment of an LLC as follows:

Single Member LLCs can be taxed as a sole proprietor (Schedule C on your personal return), an S-Corp, or a C-Corp dependent upon the election at the time the LLC is established.

Multiple member LLCs can be taxed as a partnership, S-Corp or a C-Corp again dependent upon the election at the time the legal entity is established.

Accordingly you can have an LLC legal entity and yet be taxed as an S-Corp. The only significant advantage of an LLC in my opinion is if you want to limit liability, yet be taxed as a partnership, which provides greater flexibility in terms of income allocations Vs a S-Corp where income is allocated strictly on the percentage of stock ownership. Otherwise I don't see a big advantage of an LLC.

The real question is what are you trying to accomplish as a business and which legal entity form and associated tax treatment best accommodates this effort. The advice of all parties can be valid, but ultimately what the principals want to accomplish will typically drive the answer as to both entity and tax structure.