Why does an LLC formation cost so much more than an S Corp filing?
An LLC is a business entity created by state statute, meaning that the fees are also established by the appropriate State authority. Illinois has one of the highest fees for LLC formation, so you aren’t alone in your sticker shock. On the other hand, an S Corp is a tax designation created by the Internal Revenue Code and executed by the Internal Revenue Service (IRS) – in short, they control the fees. An S Corp tax election is sought once your business entity is already formed within the state.
On another note….
It may be tempting to choose a business entity based upon cost alone, but this is not a one sized fits all decision. Some factors to consider are:
-Source and type of funding
-Number of owners
Once you examine the full picture then you can make a well-informed decision on whether your “big picture” is worth the extra bucks or not.
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