An "S corp" isn't really a kind of corporation... declaring as an "S Corp" is just an IRS thing, and either a "corporation" or an "LLC" can declare for "S corp"

An "S corp" isn't really a kind of corporation... declaring as an "S Corp" is just an IRS thing, and either a "corporation" or an "LLC" can declare for "S corp" tax status. For small businesses run by solo founders, which don't intend to take on many (or any) additional owners, don't expect to try and raise venture capital, etc., it's a pretty popular combination to go with an LLC with the "S" declaration. So the real question is "LLC or corporation"? There are good reasons for both, but some of the key factors are: 1. There's an upper limit to how many owners (members) an LLC can have, whereas a corporation can have an unlimited number of owners (shareholders). So if you're envisioning being a Unicorn one day, going public, having your stock traded on the NYSE, etc., then you want to be a corporation. 2. Venture capitalists will not invest in an LLC. There are technical / legal / structural reasons for this that I don't know all the details of, but take it as a given. VC's simply don't invest in LLC's. Now, if you start an LLC and then decide to try and raise money, does that mean you're screwed? No, as it's always possible to convert from one form to the other. But doing that is going to cost you time, money, attention, etc., and generally complicate your life. So it's probably better to pick the right option up front. 3. It's usually the case that forming an LLC is faster, cheaper, and simpler, and the annual reporting / paperwork requirements are likewise less burdensome. This is another argument in favor of the LLC if you're planning to stay solo or very small, as it's less b.s. you have to deal with as far as filling out and submitting reports and paying fees. Both an LLC and a corporation provide a measure of protection from liability for you as the founder (the "LL" in LLC stands for "Limited Liability" after all), but neither is absolute.