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LLC or Corporation or S Corp

This is a very popular question but the answer will depend on many factors regarding your business.  Florida-Incorporation.com cannot provide specific legal or tax advice but we can provide some general differences that may be helpful. In this article, we will take a look to see which is best for your business LLC, Corporation, or S Corp.

When an LLC May Be Better:

The majority of Florida Incorporation clients are small businesses.  Many of them are one owner and many are “Mom and Pop” businesses. The relative simplicity and flexibility of the LLC makes it a very good and popular choice.  That’s because regular corporations (sometimes called C corporations) and their shareholders are subject to a double tax (both the corporation and the shareholders are taxed) on the income generated by the business.   By contrast, LLC owners (called members) avoid this douLLCble taxation because the business’s tax liabilities are passed through to them. The LLC itself does not pay a tax on its income. Florida-Incorporation.com recommends talking to a tax professional before filing their taxes.

When a Corporation (C Corp) May Be Better:

If you expect to have multiple investors in your business or plan to raise money from the public, a corporation will work better.    You will want to be able to offer investors corporate stock certificates so they will have evidence of their partial ownership of the business.

Many owners, when they form a corporation, expect to be both a shareholder and an employee. The corporation can, for example, hire a chief executive officer, pay them a tax-deductible salary, and provide fringe benefits as well. These benefits can include the payment of health insurance premiums and direct reimbursement of medical expenses.

The corporation can deduct the cost of these benefits and they are not treated as taxable income to the employees, which can be an attractive feature of doing business through a regular corporation.

If you want to recruit or keep key employees by offering stock options and stock bonus incentives, a corporation is a better option.  Simply put, LLCs don’t have stock; corporations do. Therefore, if you plan to offer ownership in your business as an employee incentive, it makes sense to file a corporation.

When a Sub Chapter S Corporation (S Corp) May Be Better:

An S Corp starts out as and is originally filed with the Florida state office as a C Corp.  What makes it an S Corp is an additional IRS form (Form 2553) that is completed and sent to the IRS.   You have 75 days to file the Form 2553 after the corporation is filed with the state office. The benefits of creating an S Corp are almost all tax related so talk to your tax pro.   Florida-Incorporation.com will prepare your Form 2553 for Free ($45 value).

Florida-Incorporation.com is ready to file your LLC, C Corp or S Corp.  We offer same-day filing and a free federal Tax-ID. Our prices are among the lowest in the industry and they include all fees and certified documents from the state of Florida.  No hidden charges. We are also available to answer all your questions. Call 888-905-7380.