the aia prof practice book has a good matrix comparing all forms of ownership. if you don't own that book yet, you better get it now.

llcs have pros and cons, but s-corps seem to be gaining favor, so I wouldn't switch. my current office just went from llc to s-corp. as an llc, your personal credit history as majority shareholder is the company's, while a s-corp gets it's own life separate from yours. ms. tk just established an s-corp for her psychology practice.

LLC:

Adv - very simple, transparent taxing, only one document needed to file each year (just stating info is the same)

Dis - no control over payroll or taxes


S-Corps:

Adv - simple, transparent taxing, control over payroll and taxing

Dis - much more paper work to deal with


History - S Corps were created for small businesses, C Corps are taxed twice, so the S Corps made things easier for small businesses (taxed once).
But they still require paper work and organization, so LLCs were created a decade or two (something like that) to make things simpler.

For a small biz that is just one, two or a few people, LLC is fine. If you start making more money, growing, and want to control the payroll (which will control what income is taxed) don't mind paper work or have someone that will do it, then S Corp is good.


My company is an LLC, but I am switching to an S Corps so I can control the taxes.

what about single member LLC's? Its the advantages of a sole proprietorship but the protection of a corp?

It also depensds on what state your in. Some states do not allow architects to practice under an LLC.

Single member LLC's are viewed by the IRS as a "disregarded Entity". Anotherwords, the IRS treats you like a sole-propritership.

Keep in mind that compliance is very important with S-Corp's and C-Corp's.

LLC's are decent if your just starting out as they are simple to open and convert into other entities later.

Get your tax person and legal council on a conference call and talk through your situation. It will be worth the time spent.

Aren't architecture firms technically PLLC's, because they have professional licenses? My uncle's construction company is an LLC, but my former critic's office is a PLLC.