Question: What are the primary differences (advantages, disadvantages) between a Sub s corp. and an LLC? Is there a really good website to use that would explain them clearly?

Answer: Here are some basics:\n\nS-Corp: limits personal liability of owners to investment in the business; LLC: ditto\n\nS-Corp: avoids "double taxation" of ordinary corporations.  (Standard corporations pay income tax, then distribute profits to owners, who pay tax again on the income.)  S-Corps pass profits to owners, who pay tax on the income, but the corporation itself only files a return and doesn't pay income tax.  LLC: can basically decide whether to be taxed like a corporation, like a simple partnership, or like a sole proprietorship.  The default rule depends on how many owners the LLC has, but you can file a form with the IRS to tell it you want a different option.\n\nS-Corp: ownership limited in number and restricted to natural persons (not other corporations) and legal residents; LLC: ownership not limited by number or citizenship/residency status\n\nYou might find it easier to complete the paperwork for an LLC, though both are well-designed for small businesses.\n\nIf you go with an S-Corp, be sure to check with your state to see whether they require you to file for S-Corp status with them, too.  I've had clients who filed S-Corp status with the IRS but not the state, then the state turns up in a few years wanting corporate income tax because the company was not an S-Corp in the state's eyes, just a regular, income-tax owing corporation.  It is a very good idea to consult with a locally licensed attorney on this decision, though you may be able to handle the actual set-up yourself.\n\nI hope that helps.  Good luck.
This question from the Yahoo Q&A forum is categorized in the topic: Education & Reference