Both protect your personal assets. The main differences are taxation, payroll, and admin requirements.
LLC (Default Taxation)
- Simple setup and maintenance; profits pass through to owners.
- Self-employment taxes on net earnings.
- Flexible ownership and allocations.
S-Corp (Election on Form 2553)
- Owner-employees take a reasonable salary + distributions (potential SE-tax savings).
- Requires payroll, officer wages, and stricter bookkeeping.
- Shareholder and stock class limits apply.
Rule of Thumb
If profits are modest or variable, start as an LLC. Once consistent profits justify payroll and admin, elect S-Corp for tax efficiency.
Next step: Book a consult and we’ll run the numbers for your situation—contact us.