I am thinking about starting new business with two of my friends. We know what to do but we do not have much experience in running a company. When we were seeking information about starting a new business, the officials told us that we must chose among S corp. and LLC. We did not understand what they were talking about. Could anybody explain me the difference between S corp. and LLC and what are those? Which structure is right for my business?
S corp. and LLC are two different business structures that you can choose for your new company. Choosing the right business structure is very important. The main difference between these structures and some others is that the personal assets of their owners could not be reached to settle the obligations of their business. Therefore, if you have assets, it might be very important to you. S corps are good choices for businesses with the limited number of shareholders. LLC or limited liability companies are attractive for investors who want to use initial startup losses to offset earnings from some other sources. These are basic differences between those two business structures.
