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    6 Replies Latest reply on Sep 22, 2016 7:48 AM by Moderator Berta

    LLC vs S-Corp

    mplsnurseagency Wayfarer

      Which is better? I was thinking about going the incorporate route because I eventually would like to sell if possible, however I'm not sure which one Is better. Im not too familiar with the corporate design or structure. Can anyone help. Any advise is appreciated

      Thanks

        • Re: LLC vs S-Corp
          LUCKIEST Guide

          Good question and welcome to the Community.

          Both the LLC and the S-Corp have advantages and disadvantages..

          Guessing that you are in business now, the best advice should

          come from your Professional Accountant.

          The more we know about you and your business, the better our answers.

           

          Good luck, LUCKIEST.

          • Re: LLC vs S-Corp
            mplsnurseagency Wayfarer

            in addition to above topic the business of plan to start is a nurse staffing agency.

              • Re: LLC vs S-Corp
                LUCKIEST Guide

                Thanks for the additional info.

                I have a background in staffing agencies. Best suggestions.

                A STRONG Business Plan, A Professional Accountant,

                A Lawyer and a Banker.

                If you need help, there is SCORE. SCORE is FREE both in person and online.

                 

                Again Good luck, and stay in touch, LUCKIEST

              • Re: LLC vs S-Corp
                Moderator Rebecca Guide

                Hi mplsnurseagency!  Welcome to our community!  Choosing the correct business structure for your company may be one of the most important decisions you'll ever make, so you're wise in trying to get all the information you can. Steve Strauss, one of the world's leading experts on small business has written a great article, Choosing the Right Structure for Your Business, that lists the pros and cons of the different formats you can choose from.

                 

                Let us know a bit more about yourself and your business and we'll be able to give you some better direction. I know that many of our community members have been thru this decision making process before, and hopefully will chime in with their experiences.  Remember, it's always wisest to speak with your accountant and/or financial adviser before making any big decision.

                 

                Cheers!

                -Rebecca

                • Re: LLC vs S-Corp
                  beth@ready2inc Wayfarer

                  Hi mplsnurseagency:


                  Many people ask which is better an S corporation or a LLC.   The type of structure that is best depends on your particular situation. 

                   

                  If you are looking for investors, you may want to form an S Corporation because investors may be more likely to invest in a corporation than an LLC because you can sell stock to raise capital.  Keep in mind however that S corporations have limitations on the stockholders, for instance you are limited to 100 shareholders and the shareholders must be US citizens.

                   

                  If raising capital is not your goal and you are looking for simplicity, then forming a LLC may be a better option.  S corporations require director and shareholder meetings, minutes from those meetings, adoption and updates to by-laws, stock transfers and records maintenance.  Whereas, LLCs only require having an operating agreement and no regular meetings or minutes are required to be maintained.

                   

                  As far as taxes are concerned, neither LLCs nor S Corporations pay income tax. Profits and losses are passed through to the owner’s (members for LLC and Stockholders for an S Corporation) income tax and taxed at the owners tax rate.  However, LLCs entire net income is subject to self-employment tax, whereas only the wages of the S Corporation shareholder who is an employee are subject to employment tax. The remaining income is paid to the owner as a "distribution," which is taxed at a lower rate.

                   

                  There is a way that you can combine the benefits of both entities for tax purposes, by forming a LLC and electing to have it treated as an S Corporation for tax purposes.

                   

                  This information is for informational purposes only and I recommend that you consult with an accountant or attorney to see which type of entity would be best for you.

                   

                  I wish you the best of luck in your new business venture.

                   

                  Beth