Скачать или смотреть LLC vs S-Corp: Should you choose an S-Corp status?

Explore the differences between LLC and S-Corp in our detailed guide to help you decide if S-Corp status is the right choice for your business.
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Explore the differences between LLC and S-Corp in our detailed guide to help you decide if S-Corp status is the right choice for your business.

Timestamp Sections :

00:00 Intro
00:33 What is an LLC?
01:53 What does this look like?
03:01 How to get an LLC?
03:13 Pick a Name
03:33 Choosing a Registered Agent
03:59 Articles of Organization
04:24 Form an Operating Agreement
05:13 Get Employer Identification Number (EIN)
05:37 What is an S-Corp?
07:05 What does this look like?
09:34 Ability to Share Stock
10:20 How to get an S-Corp? - Pick a Name
10:43 File Articles of Incorporation
11:14 Initial Board of Directors
11:31 Corporation's Bylaws
12:05 After you have an S-Corp
13:30 Consideration to choose an S-Corp
15:45 Tailor Brands
16:19 How to get an LLC with Tailor Brands?
17:17 Plans & Pricing
19:16 Summary
19:51 Outro

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Understanding LLCs
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Hey guys, welcome back to the channel. If you have been wondering if choosing S-corp status is right for your business, then welcome, you're in the right place. In today's video, we are comparing LLCs to an S-corporation, or S-corp. We’ll talk about what each of them are, their pros and cons, and how to start your own LLC and S-corp. So for starters, what's an LLC? A Limited Liability Company (LLC) is a flexible business structure that offers owners a credible business with less hassle and cost than starting a corporation.

One of the greatest benefits of forming an LLC is the limited liability protection it provides its owners, known as members. This means that personal assets like your house, car, and personal savings are protected from business debts and liabilities, thanks to the "corporate veil." Another significant benefit is pass-through taxation, which allows profits and losses to be reported on individual members' personal tax returns, potentially saving time and money.

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Understanding S-Corporations
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Now that we’ve covered LLCs, what is an S-corp? Similar to LLCs, S-corp owners (shareholders) also enjoy limited liability protection. The personal assets of shareholders are typically shielded from the corporation's debts and liabilities. Regarding taxes, S-corps also benefit from pass-through taxation, meaning the business itself does not pay federal income taxes at the corporate level. Instead, profits and losses are passed through to shareholders' personal tax returns.

However, S-corp shareholders actively working in the business are paid a salary, subject to self-employment taxes, including FICA taxes. In addition to the salary, shareholders can receive distributions from the company’s profits, which are not subject to FICA tax, potentially saving money on self-employment taxes. This structure can be especially beneficial for small to medium-sized businesses, including family-owned businesses or those with actively involved shareholders.

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Choosing the Right Formation Service
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Now, should you choose S-corp status? It can be a good fit for many small to medium-sized businesses, particularly those where shareholders are actively involved in day-to-day operations. S-corps are small business friendly and offer the ability to provide stock as an incentive to employees. Despite the benefits, starting a business can feel intimidating. That's where business formation services like Tailor Brands come in.

They can help you with everything from setting up your business, handling taxes, getting business licenses, opening business accounts, and even marketing your business. I used Tailor Brands to set up my LLC, which was quicker and less stressful than doing it myself. If you want to check out a business formation service that can help set up your business for you, check out the affiliate link in the description for a discount. Thanks for watching, and don’t forget to like and subscribe for more helpful videos!

Hope you enjoyed my LLC vs S-Corp: Should you choose an S-Corp status? Video.