Legal Question in Business Law in Kansas

Pro & Cons of a Limited Liability Company compared to S-Corps

By forming a LLC would I have more or the same amount of individual protection as a S-Corp provides? Presently, I own a S-Corp. business but I am thinking of starting a LLC and having it to own the S-Corp. in order to provide more individual protection. Because I heard it is better not to personally own anything and have the LLC business own everything which can not be sued. If this is not correct please tell me how to better protect myself, tools and property in business.


Asked on 9/06/00, 12:16 pm

1 Answer from Attorneys
Alvin Lundgren Alvin R. Lundgren, L.C.

Re: Pro & Cons of a Limited Liability Company compared to S-Corps

LLCs generally provide a slight amount of greater protection than an S-corp. The main advantage to a LLC is the ease of operation. You file only a single report to the State each year and pay a nominal fee; taxes are done the same as a partnership with a partnership/LLC return and K-1s for LLC members/managers.

If your business exposes you to a lot of liabilty you may want to break up your businesses into smaller entities each in a LLC. You can have the S-Corp or another LLC own the smaller companies. Then if one of the little companies gets a judgment against it, the remaining companies are less likely to lose assets. However, this will depend on how well you keep the separate companies separate as to identity and finances.

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Answered on 10/05/00, 10:43 am


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