When you are starting a business or when you are doing some major change in the organization, getting the correct structure has a huge impact on your success. The right organizational entity helps the business or organization to achieve its goals effectively within its relationship with stakeholders and obligations to external parties.
Among the most common entity types are S-Corp and LLC.
S-Corp or S Corp is defined by the IRS as corporations that elect to pass corporate income, losses, deductions, and credits to shareholders for federal tax purposes. As indicated, S-corp is a pass-through entity.
LLC or limited liability company protects the owner from the business’ liabilities or debts. An LLC can be taxed in different ways including as a pass-through entity.
One striking difference between LLC and S-corp is requirements and obligations. S-corp has more reporting requirements while an LLC may have the same, these are treated as recommendations. S corporations are only allowed 100 shareholders while LLCs can have more and are allowed to have international stakeholders.
Getting a better fit for your organization requires a deeper assessment. Feel free to ask your Accountant in Ohio about anything related to accounting, bookkeeping, and related subjects.
Damawa Tax & Accounting Services, LLC has your back in getting your organization to prosper through Financial Management in Whitehall, Ohio. Let us start drafting the solutions to your needs.