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Category: Business Law
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Experience:  20 years experience in business law - sole proprietor, partnership, and corporations
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Hello! Could you compare S corp vs LLC? My business is a

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Could you compare S corp vs LLC? My business is a roofing repair contractor.
Which one is better in terms of Tax and Protection?

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Both off the same personal protections because both are corporations - that owners are only liable to the extent of their investment into the corporation (S or LLC).

LLC (Limited Liability Company) and an S corporation are both corporate structures that, in the United States, allow pass-through taxation. The main differences between an S corp. and LLC are:

  • S corporations 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.


I would opt for an LLC rather than the sub S - it's easier to manage and operate and doesn't have the formal requirements of a sub S.



For both you would still be required to have adequate insurance to cover your business and operations.




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