Everything You Need to Know About Limited Liability Company and Subchapter S Corporation

Both entities are created under the laws of the State of Michigan. Articles of Organization are filed to create an LLC; the end of its name must use “LLC.” Articles of Incorporation are filed to create a Corporation; the end of its name must use “Inc.” or “Corp.” Please note that a Michigan Corporation becomes an S Corp when it files an election for tax status with the IRS.

Owners of an LLC are called “members” whereas owners of S Corp are called “shareholders.” Members can choose to manage the LLC themselves. On the other hand, shareholders must elect a board of directors, who then choose the officers to manage the S Corp. The shareholders can elect themselves to the board and then choose to become the officers of the S Corp.

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If you’re interested in learning more about business law or whether LLC or S Corp is best for your new business, please call Marty Bodnar at 734-665-4441 or email him at mbodnar@psedlaw.com.