Compare Business Entities

S Corp vs LLC vs C Corp

Choosing an entity to run your business or real estate investing activities can be challenging. Understanding the differences between a S Corp and LLC or LLC and C Corp are a first step in getting a grasp on your options. The next step should be to speak with a competent advisor with regard to choosing the best business entity while looking at all three aspects of your unique situation: Asset Protection, Estate Planning and Tax Planning. At Anderson we do just that. Schedule your free consult today.

Description LLC S Corp C Corp
Provides Asset Protection  YES YES  YES
Provides Limited Liability for Owners* YES  YES YES
Charging Order Protection** Varies by State Varies by State Varies by State
Separate Personal & Business Finances (Credit)  YES YES YES
Ownership Limitations*** No Limitations Limited by Number of Shareholders
and Who Can Own Shares
No Limitations
May Have Multiple Classes of Stock  YES NO YES

 

*Several states follow the pure joint and several liability rule: “If you are 1% at fault you are 100% liable for the plaintiff’s damages.” These states have this rule and are considered less desirable for filing an entity in: AL, AZ, CA, DE HI, IL, KS, KY, ME, MD, MA, NC, RI, VA

**All states offer inside liability protection but only a few states offer outside liability protection. The two strongest states are Nevada and Wyoming.

***LLCs and C Corporations can have any individual who lives in or outside the U.S. or any other entity in or outside the U.S. as an owner (Member, Shareholder). The S Corporation has limitations on shareholders. The limitations include no more than 100 shareholders and only individuals, certain trusts or estates with U.S. tax identification numbers are allowed to be shareholders. Partnerships, C Corporations and non-resident aliens are not allowed to be shareholders.

 

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