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are typically better because they are less restrictive and are particularly suited for small businesses
. Both have "pass through" taxation, so there is no difference in the way they are taxed as earnings transfer through to the owner. They both provide protection from personal liability of the owner so they are equal there as well.
These are the main differences:
are more restrictive on who the shareholders
(owners) of the company can be.
S corporations are required to pay a salary to those owners who work for the company and own more than 2% of the company. In contrast, LLCs are not obligated to pay a salary to its members (owners). This has tax implications for some companies like single-person ventures.
S corporations are required to maintain and file formal records for the board and shareholder meetings.
S corporations are allowed to have only one class of stock.
It is a little easier to set up employee stock option plans for S corporations than for LLCs.
So if it were me, I would set up an LLC for the business