Frequently Asked Questions

What is the difference in length of existence between an S corporation and an LLC?

The length of existence is one of the key differences between an S corporation and an LLC. An S corporation has a perpetual existence, meaning it can continue indefinitely. This is because the corporation is considered a separate legal entity from its owners, so it can survive beyond the lifespan of its original shareholders. This can be beneficial for long-term business planning and continuity. On the other hand, an LLC's existence can be more limited. Some states require that an LLC specify a dissolution date in its operating agreement. Additionally, certain events, such as the death or withdrawal of a member, can trigger the dissolution of an LLC. This means that the lifespan of an LLC can be more uncertain and potentially shorter than that of an S corporation. However, it's important to note that the specific rules and requirements can vary by state, so it's always a good idea to consult with a legal professional or business advisor when deciding between these two types of business structures. They can help you understand the implications of these differences and choose the structure that best fits your business goals and objectives.