S-Corp or LLC?

[mikebol]

Hello everyone!

I am a technology professional located in GA looking to incorporate and start a part time business providing consultant type services. I will not be selling any hardware or other durable taxable items, simply services. I have no plans to have employees but could sub-contract to other technology professionals from time to time.

So, I've decided to incorporate as I plan on investing more time and effort in my side business and one day make it my primary business. Doing so, I'd like incorporate to have more of a presence than a simple sole-proprietor and also to shield my personal assets should something ever go wrong.

I'm struggling between incorporation as an S-Corp or an LLC. Both of these seem very similar in nature and I was wondering if anyone could articulate the advantages and disadvantages of both.

Thanks for all advise!

Mike Bolser

[aangelica]

Hi Mike,

Both structures are similar in that they provide limited liability protection and pass-thru taxation. The differences lie in the 1) management and operational flexibility and 2) self-employment taxation.

Here's an article that clarifies these differences (with real-life examples and a comparison chart):

S Corp vs. LLC: Which Structure is Right for Your Business