An LLC or “Limited Liability Company” is a type of legal entity that can be used to provide you with legal protection in the event your business gets sued. An S-Corporation is a tax election that can be used to tell the IRS that you want to be taxed a certain way.
An S-Corporation is NOT a legal entity – this is something that many people don't understand. You don't form an S-Corporation. You form a C-Corporation or an LLC, and then you make the S-Corp election if you want to be taxed as an S-Corporation.
I realize this is confusing. Take a minute to watch this video where I talk more about how this works and whether you should make an S-Corporation tax election for your online business.
