What are your big concerns? Taxes or liability protection? If liability protection, the answer will vary by state but the corporation will usually give you better liability protection than an LLC.
From a tax perspective, the IRS doesn't recognize the LLC as a business entity type. If you own a single-member LLC you'll be taxed as a sole-proprietor by the IRS & pay income and self-employment taxes on the net taxable income of your LLC. If your LLC has more than one member you'll be taxed as a partnership. An LLC can elect to be taxed as a corporation, either C or S.
An advantage of the S Corp is the losses will flow to your personal return. This is likely to be most beneficial in the earlier years when you're pumping money into the company. As long as you have sufficient basis in the company, the losses are deducted from your ordinary income on your personal tax return.
The taxation of LLCs vary by state too. Some states have a low franchise tax on LLCs. CA, on the other hand, has a $800 minimum tax on LLC (and corporations). The franchise tax in some states is based on gross revenues so be aware of that if you expect to have low-margin product.
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What are your big concerns? Taxes or liability protection? If liability protection, the answer will vary by state but the corporation will usually give you better liability protection than an LLC.
From a tax perspective, the IRS doesn't recognize the LLC as a business entity type. If you own a single-member LLC you'll be taxed as a sole-proprietor by the IRS & pay income and self-employment taxes on the net taxable income of your LLC. If your LLC has more than one member you'll be taxed as a partnership. An LLC can elect to be taxed as a corporation, either C or S.
An advantage of the S Corp is the losses will flow to your personal return. This is likely to be most beneficial in the earlier years when you're pumping money into the company. As long as you have sufficient basis in the company, the losses are deducted from your ordinary income on your personal tax return.
The taxation of LLCs vary by state too. Some states have a low franchise tax on LLCs. CA, on the other hand, has a $800 minimum tax on LLC (and corporations). The franchise tax in some states is based on gross revenues so be aware of that if you expect to have low-margin product.
Take a look at http://www.biztaxtalk.com for more on taxation of various entity types.