LAW OFFICES OF ALAN B. HENDRIX

350 Indiana Street, Suite 150
Golden CO 80401
Phone: (303) 759-9111
Facsimile: (303) 271-0101

alanbhendrix@yahoo.com

Business Formation/Commercial Representation

The right corporate choice can produce big tax savings for businesses. Tax law views corporations either as C-corporations or S-corporations. C corporations can provide all their employees, including shareholder-employees, with generous tax deductible fringe benefit packages. S-corps allow shareholders to avoid double-taxation on profits and sometimes allow shareholder-employees to save on self-employment taxes.

S Corps and LLCs are similar in that they are both “pass-through” entities for tax purposes; the income of these companies are passed through to their owners and reported on the owners’ personal income tax returns, thereby eliminating the double taxation incurred by owners of a standard corporation, or C corporation. (With a C corporation, the net business income is subject to corporate income tax, and the monies remaining after the corporate income tax are taxed a second time when they are distributed as dividends to its owners who must then pay personal income tax.) So what is the difference between an S corporation and an LLC? And which structure is right for you?  The answer depends on your own unique situation.