Benefits of LLC’s over S-Corporations

The Limited Liability Companies (LLC’s) are now one of the most popular choices for incorporations over the sub-Chapter S Corporations.

Features of an LLC

• This type of entity is a form of business ownership that has several attributes of corporation and partnership structures.
• An LLC is neither a corporation nor a partnership.
• An LLC may be called a limited liability corporation, but the correct accepted terminology is Limited Liability Company.
• The LLC’s owners are generally referred to as members not partners or shareholders.
• The number of members of an LLC is unlimited and may be individuals, corporations, or other LLC.

Benefits of LLC’s over S Corporations

1. Lower Annual State Filing taxes:
First of all the Corporations have higher minimum taxes in most states (except in California where the minimum taxes are the same $800.00). In New Jersey, for example up to 2 member LLC does not require annual filing tax. However, with 3 or members the tax is $150 per member.

2. Simple to Dissolve:
The LLC’s in many states including most of the North East States are easy to dissolve without much effort. For example in New Jersey it costs only $100 to dissolve whereas the Corporation requires a lot more

3. No Minutes or Corporate Resolutions required:
Corporations are required to keep formal minutes, have meetings, and record resolutions. The LLC business structure requires no corporate minutes or resolutions and is easier to operate.


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