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re: S corp or LLC
Posted on 3/16/14 at 9:22 am to Ace Midnight
Posted on 3/16/14 at 9:22 am to Ace Midnight
quote:I think you have it backwards. An S-corp can't have corporate shareholders, and they are limited to one class of stock. An LLC, on the other hand, can have any type of entity as a member, and it can allocate income, losses, deductions and credits in any manner so long as the allocations have substantial economic effect.
An S-corp would only be superior, in my mind, if you wanted to open it up to investment to corporate entities and/or issues more than 1 class of stock. In virtually all other situations, the LLC would cover you up until the point you needed to reorganize as a full corporation.
3
Posted on 3/16/14 at 9:24 am to Poodlebrain
Poodle - Which is better for buying rental property with a partner?
I'm purchasing more rental houses with a partner and his income is substantially higher than mine. Is this going to be a mess during tax season?
I'm purchasing more rental houses with a partner and his income is substantially higher than mine. Is this going to be a mess during tax season?
Posted on 3/16/14 at 9:28 am to Poodlebrain
This is generally correct, but in certain industries, neither is preferable. For instance, I do some venture capital work, and they will not invest in LLCs and are generally prevented from investing in S corps. I've had to convert many LLCs to C corps to facilitate venture capital investments.
Posted on 3/18/14 at 3:15 pm to Poodlebrain
quote:
I think you have it backwards.
I think I did reverse that.
LLCs were relatively new back when I went to law school - the buzz was they would, effectively, replace S-corps over time, and certainly very few people recommend even starting an S-corp - except in very, very few, unique circumstances.
Existing S-corps - probably not worth the trouble to convert - but, without stats, I suspect the number of new organizations under LLC dwarfs S-corps.
This post was edited on 3/18/14 at 3:16 pm
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