Forming a Company: Do You Choose an LLC or S-Corp?

Ever been to a restaurant with a menu written in a foreign language? Choosing how to structure your business may feel like you are trying to understand a foreign language because so much is at stake. Here are three steps you should take when choosing between an LLC or an S-Corp.

First, determine how many people will be owners or shareholders in the business. LLCs can have unlimited members while S-Corps can only have 100 shareholders or less.

Second, consider how you would like the company to be managed. S-Corps have fixed rules that govern management practices and more structured rigid rules. LLCs can be managed using the structure of your choosing with fewer default management provisions. 

Third, determine whether you will invite additional investors to raise capital at a later stage. We work with our clients CPAs to ensure we have the company set for success.

Talk to an attorney today about structuring your business as an LLC or an S-Corp to help you translate the difference.