Small Business Services
What are the differences between an limited liability company and an S corporation ?
Both entities provide the benefits of pass-through taxation to avoid double taxation of profits as well as limited liability for the owners. S Corporations pass-through income to the shareholders who pay no Self Employment tax on that income, While LLC income is subject to self- employment tax. S corporations have restrictions which are not applied to limited liability companies. Limited liability companies cannot issue stock, but rather, they offer memberships. S corporations, issue stock and are owned by the shareholders. S corporations are managed by the directors and officers, while limited liability companies are managed directly by the members unless they hire managers
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