Frequently Asked Questions

What are the similarities between an LLC and an S corporation?

The similarities between an LLC (Limited Liability Company) and an S corporation are numerous, and understanding these similarities can help you make an informed decision about the best business structure for your needs. Both LLCs and S corporations offer limited liability protection to their owners, meaning that the owners are not personally liable for the business's debts. This is a significant advantage for business owners, as it protects their personal assets from being seized to pay off business debts. Another similarity between LLCs and S corporations is their tax structure. Both business structures operate as pass-through tax entities. This means that the profits of the business are passed through to the owners, who then pay taxes on those profits. This can be beneficial for business owners, as it avoids the double taxation that can occur with other business structures. Additionally, both LLCs and S corporations can deduct pre-tax expenses, such as travel, phone, car, gifts, advertising, computers, and more. This can help to reduce the overall tax burden for the business.