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LLC (Limited Liability Company) or S Corp: Which is Better for the Self-Employed?

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By Stephen Windhaus
Through two decades of small business development in the public and private sector, I have learned that the legal structure of small business ventures revolves around the entrepreneur’s desire to protect his/her assets, while having the flexibility to direct revenue to one’s personal income with the least amount of expense, and avoiding a lot of paperwork. Until a few years ago, the “either – or” debate revolved around proprietorship vs. an S corporation. The introduction of the simple Limited Liability Company (LLC) changed that debate to either an LLC or S corporation. Again, the emphasis remains on liability, ease of accessing revenue for income and avoiding paperwork.

For the purpose of this column, please note that we are addressing the condition of self-employment with no employees, and for good reason. According to a Small Business Administration (SBA) report issued in December 2004, there has been phenomenal growth of self-employment. In the year 2000 there were 11.5 million non-agricultural ventures in the U.S. That grew to 12.2 million in 2003 of which 2.9 million businesses were unincorporated.”

LLC (Limited Liability Company) or S Corp: Which is Better or the Self-Employed? from The Corporate Bee, Feb. 2006. Quoted at the Small Business CEO blog.

About Becky McCray

Becky started Small Biz Survival in 2006 to share rural business and community building stories and ideas with other small town business people. She and her husband have a small cattle ranch and are lifelong entrepreneurs. Becky is an international speaker on small business and rural topics.

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