Maybe it works differently in different states, but I was told that an LLC is kind of the best of both worlds. You can elect whether you want to be taxed as a sole proprietor or an S-corp. We have had our LLC for many years and we were initially taxed as a sole proprietorship. However, several years ago, we made the change to S-corp status as it provided other advantages that outweighed the sole proprietorship treatment. I think the warning I got was that once you make that change it is very difficult to go back, but I let my accountant make the call.
Good idea to talk to an attorney before you make that kind of change.
Best,
Robert A. Franco
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