An LLC is a type of business entity while an S corporation is a corporation with a special federal tax election. Either an LLC or a C corporation that meets certain requirements can apply to be treated as an S corporation for tax purposes. An S corp is similar to an LLC in that it can help its owners avoid double taxation.

A C corporation, under United States federal income tax law, is any corporation that is taxed separately from its owners. A C corporation is distinguished from an S corporation, which generally is not taxed separately.

S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates.