Forums: Discussions for entrepreneurs and small business.

Just to clarify for those who mentioned an S Corporation..

An S Corporation is not an entity in and of itself. An S Corp is either a regular corporation that has elected "S corporation" tax status, or an LLC which is being taxed as an S Corp.

You can't just form an S Corporation without first forming an entity, such as a Corporation or LLC.

The reason for a Corporation to file S Corp tax status is to avoid double taxation and have the profits and losses flow through to the shareholders.

LLCs for the most part "replaced" S Corporations, but there is still a benefit for an LLC to be taxed as an S Corp: S Corps are not subject to self-employment taxes.  Typically if your LLC is making less than 100k/year, the filing and accounting fees associated with an S Corp are not worth it.  If you are making more than 100k/year, an S Corp tax election is certainly worth looking in to.

 

 

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I'm going to have to disagree with nuevolution on this one. I don't claim to be an expert; but from what I've found dealing with taxes for a LLC is much simpler than that for a S Corp (which has very strict guidelines). Thus, I would recommend going with a LLC.

Disclaimer: I have never owned a S Corp, so this is just based on what I found when I was making the same decision.

Also, regarding the original topic, DBAs are very easy to get and fairly cheap (I've only ever had to walk papers over to city hall with ~$20) in most places so go get one!

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Chris Bennett - Chief Operating Officer - Hyperion Code - A developer of productivity improving software