Choosing the Right Entity Structure: LLC, S-Corp, or C-Corp?

When you start a business — or reach a new level of growth — your entity structure has major implications for how you're taxed, how you're protected, and how investors view your company. There's no universal right answer, but there is a right answer for your specific situation.

Here's how we explain the key differences to clients at Kamish & Associates.

LLC: Flexibility With Protection

A Limited Liability Company (LLC) is the most common choice for small business owners because it's simple, flexible, and separates your personal assets from business liabilities.

• Pass-through taxation — profits flow to your personal return
• No double taxation — unlike a C-Corp
• Minimal formalities — no board meetings or stock issuances required
• Flexible management — member-managed or manager-managed

For many solopreneurs and early-stage businesses in Florida, an LLC is the right starting point.

S-Corp: Tax Savings at Higher Income Levels

An S-Corporation is a tax election, not a separate entity type. An LLC or corporation can elect S-Corp status with the IRS.

"For business owners earning $60,000 or more in net profit, S-Corp election often produces meaningful self-employment tax savings."

With an S-Corp, you pay yourself a reasonable salary (subject to payroll taxes), and take additional profit as distributions — which are not subject to self-employment tax. The savings can be significant at scale.

• Requires payroll setup and quarterly filings
• More administrative overhead than a simple LLC
• Must meet IRS eligibility requirements (e.g., no more than 100 shareholders)

C-Corp: Built for Investment and Scale

A C-Corporation is a separate taxable entity. It pays corporate income tax, and shareholders pay tax again on dividends — the famous "double taxation."

Despite that, C-Corps are often the right choice when:

• You're raising venture capital or bringing on investors
• You plan to issue multiple classes of stock
• You want to retain earnings in the business at the lower corporate tax rate
• You're building toward an acquisition

Which Is Right for You?

The decision depends on your income level, growth plans, investor needs, and administrative capacity. This isn't a one-size-fits-all answer — and it's worth revisiting every few years as your business evolves.

Kamish & Associates helps Tampa Bay business owners model the tax impact of each structure and make the right call. Contact us at admin@kamishcpa.com or call 813-560-1832.