LLC vs. S-corp vs. C-corp
- April 16, 2015
- Comments Off on LLC vs. S-corp vs. C-corp
Lots of startups wonder about the advantages of an LLC vs. an S-corp vs. a C-corp. There’s no doubt that it’s an important question, but the answer depends in large part on what you’re looking to accomplish. If you’re looking to take funding, chances are you’ll want to go with a C-corp as that’s what a lot of investors prefer. If you don’t want to deal with the red tape inherent in a corporate structure, an LLC makes sense.
The difference between an S-corp and a C-corp is that a C-corp is taxed as a corporation while an S-corp is a “pass through entity,” meaning that the taxes are passed through to the shareholders. An LLC is also a pass-through entity; members of an LLC are essentially taxed as a sole proprietor (if only one member), or a partnership (if more than one member).
Of course, the decision of what corporate structure to choose for your startup is extremely important and one that shouldn’t be made on the fly. Be sure to speak with an experienced startup or small business lawyer who can help you navigate the decision of whether to form an LLC, an S-corp, or a C-corp.
Here’s a video from our friends at (and featuring yours truly) that breaks it down: