When it comes to choosing a business entity, the choice between LLC and S corporation can be confusing at times. This simple chart answers a few of the basic questions. Please refer to this article from Business.gov for more information about the prevalence and rules regarding LLCs and S corps.

Feature	LLC	S Corporation
Income Tax treatment	Sole proprietorship if one owner, and partnership if two	Pass through income tax treatment for owners-Similar to LLC
Basis Rules	Owner’s capital investment plus his/her share of business debts	What owners paid for stock initially, and what owners lent to the businesses initially
Employment Taxes	Owners considered self-employed and pay self-employment tax on share of net earnings	Owners considered employees
State Taxes	Each state has its own rules.	Each states has its own rules.
Raising Capital	Newer entity so investors may not be as familiar.	Investors may be more familiar with this entity.