he main advantage of electing to be taxed as an S-corp is that the corporation will pass income through the corporation and onto its shareholders. As opposed to a C-corp, which pays taxes at the corporate level, an S-corp itself does not pay taxes, but its shareholders do.
One of the advantages of a C-corp is that it can issue multiple classes of stock. An S-corporation can’t do this, which typically means that founders forego the authorization of preferred stock. If your company is planning to take on investors, this could present a big problem.
C-corporations, S-corporations, and multi-member LLCs all must obtain an EIN from the IRS. If you are the only member of a single-member LLC, you may be able to use your Social Security number rather than obtain a separate EIN number.
Many entrepreneurs find that their business outgrows its original structure (or perhaps grows in a different direction). One common example is LLCs that approach outside investors for funding: many times, the investors will require that the LLC convert to a Delaware corporation, in large part due to the favorable legal climate in that state.
A member-managed LLC is the simplest arrangement, which makes it attractive for people attracted to the LLC structure for its relative simplicity (at least when compared to a corporation). In a member-managed LLC, the members – that is, the owners of the LLC – run the business.
Setting up a business is a one-time affair, but keeping the entity in good standing takes time and money.
The answer depends on the state in which your LLC is formed.
Setting up a PLLC or PC usually requires a few extra steps in comparison to an LLC or corporation. The members of the entity may need to provide proof that they are qualified to join the company. For example, attorneys forming a PC may need to submit copies of their law license.