LLC or SUB S

An LLC is more flexible than a Sub S corporation because any entity can be a member, there can be different classes of stock, there can be any number of members, and the profits can be allocated to the members in any way. A Sub S corporation has one great advantage though. You can save on payroll taxes because any profits above a reasonable salary for the owner escapes self employment taxes. Not so in an LLC where all profits are generally subject to self employment taxes.