Legal Question in Business Law in Minnesota
Extra work of an S-Corp over LLC?
I am working on incorporating my business. I am just a single man web development and hosting operation. I have read every last word I can find on MN's SOS site and IRS site. Everyone says an S-Corp is so much more work to maintain that an LLC. But what exactly do you have to do with the S-corp that is so much more work? From what I have read you just have to file yearly with the SOS renewing you corporate entity plus have a yearly boarding meeting where meetings notes are recorded and affidavits are filled out proving that all board members were notified of the meeting. As far as the LLC I am not even 100% sure what you need to do to maintain it.
2 Answers from Attorneys
Re: Extra work of an S-Corp over LLC?
A good chunk of my work is advising start-ups over the last 20 years, and by far I recommend LLC's as the vehicle.
Most CPS's who I have worked with agree that LLC's are an optimum hybrid (of corporate and partnership benefits) and expediency.
If you are a one person LLC, there are no additional tax returns to file, and other than organizational documents, very little annual maintenance and cumbersome regulations and formalities.
Call or e=mail if you wish further assistance.
This is what I do.
Re: Extra work of an S-Corp over LLC?
I suggest you talk to your accountant and get his or her input as to what may be best in your particular situation. I find that a Sub-S is pretty easy to maintain; you do have to file an annual tax return, so there is a little cost there. However, either vehicle will generally serve you well as long as you observe the formalities, such as being certain to use the corporate designation (ABC, Inc. or ABC, LLC) in all the paperwork, signing in a representative capacity, etc.
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