human
Explain the difference between an LLC and an S corporation.
assistant
An LLC, or Limited Liability Company, is a type of business structure that offers limited liability to its owners. This means that if the business has debts or is sued, the owner’s personal assets are protected. An LLC is taxed as a pass-through entity, meaning owners report business profits and losses on their personal income taxes. An S corporation is another type of company that is also taxed as a pass-through entity; however, shareholders of an S corp can pay themselves with salary, dividends, or a combination of the two. This type of corporation also limits the liability of its owners, but has additional restrictions and may be subject to other taxes.