S-Corp Vs. LLC
I just read a bunch of comments on the importance of incorporating. Not one of you wrote about S-Corp.
Does the LLC have that compelling and advantage?
I just thought it was trendy and at specific times, better. But it seems the industry is all in favor of the LLC.
All except my accountant.
OOoops.
Should I be switching to LLC?
Neill7,
Everyone's tax situation is different what is good for me may not be good for you.
I would listen to your accountant, this is the person who at tax time speaks the softest with Uncle.
John $Cash$ Locke
While it may be good to listen to your accountant as a general rule, you need to know if your accountant is proactive or reactive with your situation.
If you are only going to see your accountant at tax time, there is not much they can do at that point.
However, if you and your accountant are setting you up the next 3-5 years outlook for you, then you have a real partner!
[addsig]
As a founder of both Missouri LLC's and Scorps, I'd have to say LLCs have a lot lower paperwork load, and in some cases some pretty significant tax advantages. IMO, LLCs are better suited for small companies like ours.
This is NOT legal advice. Seek the advice of an attorney or accountant in your jurisdiction.
That said, for most small investors, an LLC has most of the same advantages (namely, the limited liabilty) provided by an S Corp, and considerably fewer of the disadvantages (paperwork and no tax pass-through).
I don't know much about investing (yet), but I can tell you that if you are not retailing merchandise, the instances in which an S Corp would be better for a small businessman are few.
This applies most directly to single-member LLCs. Some of the paperwork burden returns when you have a multi-member LLC and unless the other member is your spouse, there are some inter-member protections that might make a Partnership a superior business form.
Good luck!
Scott
There are some MAJOR advantages of having an S corp over an LLC! My accountant focuses on helping small business and is totally pro real estate investing. If you want his name, let me know. He is in Missouri.
I have two reasons for liking a corp. Actually, I favor a C Corp. here's why:
1. The corporation has been around for centuries. It's policies are tried and true. My biggest fear about being in business and being successful is that someone with a grudge and a lawyer is going to try to take it away from me.
A C corp may be overkill, but it helps me sleep better. IMHO, the veil of separation is more easily removed in an S corp where you can show flow-through. Therefore, it can be shown not to be a stand-alone entity, but an extension of a sole proprietorship.
2. I don't remember my second reason now, but maybe I'll think of it later.
Just my opinion. I could be wrong.
Ronnie
thanks guys,
Mjensen, thank you and yes, I would like the name of that person in Missouri.