Business owners will want to compare the various merits of the legal structure of an Oregon Limited Liability Company and and Oregon Corporation.

The advantages of an LLC over Corporation (S-Corporation):

  1. Double Asset Protection - An advantage of an LLC over a corporation is that in many states is something called “double asset protection.” A shareholder of a corporation is protected from the liabilities of the corporation. A member of an LLC is also protected from the liabilities of the LLC, but in addition personal creditors cannot take the LLC.
  2. Formality – An LLC involves less formal documentation than a Corporation because it only involves members rather than the three layers of shareholders, officers, and directors.
  3. Allocation of Profits/Losses – An LLC is able to make “special allocations” of profits and losses amongst members. S corporations have one class of ownership, profits and losses are allocated on a percentage basis.
  4. Tax basis – An LLC allows money borrowed to increase the tax basis of the owners and lower taxes.
  5. Contribution of property – An LLC allows contribution to the LLC to not be taxable even for minority interest owners. (For corporations it is only for controlling owners).
  6. Ownership – An LLC may have owners who are foreign persons, corporations, and any kind of trust. Corporations have limitations on ownership.
  7. Members – An LLC may have an unlimited members (S-Corporation is 100)
  8. Lose of Status – If an S Corporation violates the rules it loses its s-corporation status for 5 years.

Read next about the advantages of a Oregon Corporation over an Oregon LLC (Limited Liability Company).

 

Inquire About Hiring Our Firm: To Form an Oregon LLC; To Review a Contract; As the General Counsel to provide preventive legal advice the LLC.

Read Articles from the Oregon LLC Library or about Oregon Business Law.

For any additional information, contact us at (503) 274-9001 or by CFLink or return to the home page of Bend Oregon Business Lawyer.