From a Sub-S corporation to a C-corp and limited liability company (LLC), there are a number of entity choices for a start-up company to select. However, it is absolutely imperative for every start-up to thoroughly review their options and identify the right entity type. In Fort Lauderdale and throughout the state of Florida, selecting the most ideal entity form is very important when it comes to business formation.
The U.S. Small Business Administration provides information which helps explain some of the differences between an LLC and an S-corporation on their website. For example, an LLC does not have any limitations with regard to the number or type of business owners it can have, whereas an S-corporation cannot have over 100 owners (family members are counted as one). Furthermore, owners of an LLC are required to pay self-employment tax, while S-corporation owners sometimes pay less in taxes.
The Internal Revenue Service also published helpful information on different business entities, including LLCs, S-corporations, partnerships and sole proprietorships. Additionally, the IRS covered the various requirements companies must meet to qualify for a particular status and the tax filing requirements associated with different entity types. Although there is quite a bit of useful information online, it is still difficult for many start-ups to determine which business entity is best. After all, there are a variety of factors to take into consideration on top of individual business objectives and tax-related issues. As a result, many smart business owners consult a legal professional for help making the right decision.