S-corp or LLC for small video business

[roxics]

My partners and I are starting a video business. Three of us. We'll be shooting weddings, events, music videos, promo stuff and night club stuff. Side gigs to our day jobs mostly. Although we would all like to eventually make it our primary job.

I have some experience with an s-corp because I started one with another partner of mine last year for a website/company we're building. But we're still not off the ground with that yet so we're not making money or doing anything heavy with it. As a result my experience with it is limited only to starting it and filing the basic quarterly tax reports. I chose an s-corp for that because we assumed we would eventually get investors and dive shares to places, etc. Hoping to become a multimillion dollar company eventually.

However for this video business it's different. We're pretty much just taking odd video jobs and each of us are using/buying our own gear. We would rather work more like a guild. A group of guys that come together to complete a task, each being an independent party of sorts. But we know it looks better to potential clients to be a formal company.

We're probably not going to make much money off this, so simple is better, less taxes, less frustration and some personal protection against being sued. Will an LLC provide of this flexibility or are we better off going all the way with an s-corp?

 

[MikeWilkinson]

LLC will give you some level of protection of your personal assets in the case of a client trying to file a lawsuit. You do have some flexibility when filing the paperwork to become an LLC to have several people as owners or something... the exact language escapes me at the moment but there is something in there that addresses this.

It might be dicey when it comes to bank accounts, and who is it that's keeping track of the books, etc. I've tried to work with friends before with that sort of arrangement and it was frustrating... then again I can be a control freak so whatever My advice would be to have one person manage it (preferably the person who does the majority of the video work) and then the others they work with can just get hired on as subcontractors... I don't know about S-Corps so maybe there is someway to do this easier?

 

[keylight]

Both will afford some level of protection as far as debt and liabilities go (limited to assets held by the corp) but neither have any real tax advantage. Both pass through taxes to the shareholders who then report income on their individual taxes.

Each state has it's own laws for setting these up. If it were me, I would lean towards an LLC as it is probably the simpler of the two....