Legal Question in Business Law in New York

Re: LLC versus Sub Chapter S Corporation

LLC is more flexible but slightly more costly (annual fees and publication costs).

Sometimes it depends on character of business to be conducted.

If handled properly, issues of liability, etc. are about the same.

Re: LLC versus Sub Chapter S Corporation

The LLC and the S Corporation provide the limited liability of a traditional corporation while offering the tax benefits of a sole proprietor or a partnership (thus avoiding the double taxation of traditional corporations.)

Certain restrictions apply to S Corporations that do not apply to LLC�s. Some of these restrictions include limit on the number of stockholders (a maximum of 75); S Corporations may only issue one class of stock; only citizens or permanent residents of the United States may be stockholders. Certain types of business

may not take the form of an S Corporations.

Consequently, the LLC allows greater flexibility in management and business organization. For example, LLC�s do not have the ownership restrictions of S Corporations allowing for foreign investors to become LLC members or managers.

As well as speaking with an attorney, plan on consulting an accountant to discuss the advantages and disadvantages of an LLC and an S corporation vis-a-vis your planned business endeavors.