This is really more of a tax issue than a choice of entity issue.  There are some tax advantages to corporations for owners, however, you don't have to form a corporation to get them.  With the "check the box" tax selection, an LLC can choose to be taxed as a corporation.

Generally, an LLC for choice of entity will work well for most people and you don't have to worry about the corporate formalities that most small businesses don't want to be bothered with.  Another big concern I consider is what happens if one of the owners gets sued.  If a creditor of a member of an LLC gets a judgment against him, it can only get a charging order requiring any disbursements made to the member be paid to the creditor.  The creditor cannot acquire the member's membership interest and become a part owner.  With a corporation on the other hand, the creditor can get the owner's stock and become a full fledged voting shareholder.

A corporation has some advantages, though, particularly if you want to sell stock in the business.  And, the law is much more settled in the area of corporation than LLCs, which provides more predictability.

Of course, state law may vary, so always check with your attorney before making any decisions.

Best,
Robert A. Franco
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