How does a limited liability company (LLC) differ from a Subchapter S corporation?

Question

Quizplus · Accepted Answer

An LLC has no limit on the number of members it can have, while a Subchapter S corporation is restricted to no more than 100 shareholders. The other choices are incorrect - LLCs are not taxed at a higher rate than Subchapter S corporations, in fact they often have lower tax rates, and the liability protection for members of an LLC is typically stronger than for shareholders of a corporation. Additionally, LLCs can choose how they want to be taxed (as a corporation or a partnership) while Subchapter S corporations are always taxed as a pass-through entity.

How Does a Limited Liability Company (LLC) Differ from a Subchapter