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CORPORATIONS

 

Corporations

 
A corporation is a separate and distinct entity separate from its owners shareholders.  Thus, a shareholders assets are not at stake if the corporation is sued for civil or financial liability.

Probably a C corporation is best though with an S corporation you can avoid double taxation (once to the shareholders and again to the corporation) by electing to be treated as an S corporation.  However, the double taxation concern comes in only if you are making a lot of income. 

Generally, an S corporation is exempt from federal income tax other than tax on certain capital gains and passive income.  On their tax returns, the S corporation's shareholders include their share of the corporation's separately stated items of income, deduction, loss, and credit.
 
 

LLCs similar to a corporation, owners have limited personal liability for the debts and actions of the LLC.  Other features of LLCs are more like a partnership, providing management flexibility and the benefit of pass-through to owners  taxation.