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Old 12th July 2006, 01:35 PM
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LLC vs. S-Corp

Anybody have knowledge of what the best choice would be for a Online Business, Or something completly different ?


Some quick things i have found about the two below :

With an LLC you must pay self-employment tax on every dollar of net income plus personal income tax.

With an S-corp you can have your accountant set up a situation where you are taking some of the profit as a salary for which payroll taxes are paid. However the advantage is you can also take income as a distribution where no self employment taxes are paid.
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Old 12th July 2006, 03:53 PM
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Re: LLC vs. S-Corp

those both give protection from liability but depending on the bussiness and , how big or how fast it grows a DBA might work for you just as well. im not quite sure what you are looking for in a structure kike advantages or disadvantages.
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Old 12th July 2006, 04:21 PM
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Re: LLC vs. S-Corp

One thing is for sure. If you have a load of domains that are likely to become worth a huge amount of money soon, you need to have the BEST structure in place (tax, protection, offspring) BEFORE the domains realise their full value.

Doing it later is a lot more costly, tax wise, and sometimes it's left too late.

If you live in a litigation-happy jurisdiction, it makes very good sense to have the domain name leases stored in an appropriate structure in a different jurisdiction, where they're a lot harder to get to via a law suit.
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Old 12th July 2006, 07:31 PM
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Re: LLC vs. S-Corp

I use an LLC for my domains and other projects - which provides adequate protection with minimum beauracracy and overhead costs.
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Old 12th July 2006, 09:13 PM
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Re: LLC vs. S-Corp

I was thinking about this issue, if i were to charge my domain business to my limited company, it will be a logistic nightmare - every paypal payment, every domain registration, i would have to print out and file the supporting document for auditing purpose! Surely there must be an easier way?

For the time being, i'm just using a cashflow method - any money that is deposited into my company bank account will considered revenue, and money paid out directly from company account will be expenses. Money in and out of Paypal, which runs into the thousands of transactions i think, is currently not factored into the bookkeeping.

Last edited by touchring; 12th July 2006 at 09:22 PM..
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Old 12th July 2006, 09:29 PM
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Re: LLC vs. S-Corp

We also use LLC

Inside the US:
Delaware & Nevada generally offer best protection because of favorable corporate laws put in place, and low costs. Better lawsuit protection, etc.

In terms of LLC vs. S-corp there is plenty of info online, basically comes down to individual situation:

http://www.selfemployedweb.com/s-corp-vs-llc.htm
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Old 12th July 2006, 10:16 PM
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Re: LLC vs. S-Corp

If you are US, every state is a little different. Some advantages to NV and DE, but some other states have their own advantages. You really should talk to a tax lawyer or tax professional. Some will discuss it for free, if they already do your taxes.
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Old 13th July 2006, 12:40 AM
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Re: LLC vs. S-Corp

Our businesses with employees are S corportions. The advantage is definately saving on taxes, as this allows the profits of the corportion to flow thru to you and you are taxed (only once) usually as part of your personal tax return. The corporation still has to file a federal tax return as well. I see quite a few real estate investors use LLC where they are not taking a lot of income, but rather building equity in the real estate.
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