Decide between forming an LLC and a corporation (C-corp or S-corp). Most operators choose LLC for tax efficiency and flexibility. Corporations win for VC fundraising, stock-option compensation, and certain professional-services structures. The snapshot summarizes the decision criteria.
Bootstrap-and-keep, VC-fundraise-and-exit, family/professional services. Each path points to a different default.
Tax efficiency, anonymity, fundraising readiness, ownership flexibility, compliance burden.
LLC, S-corp, or C-corp. Plus a one-line rationale and the matching Anonymousllc.co SKU.
Static snapshot pulled from current state filing fees, statutes, and pricing data. Updates when source data changes.
| Criterion | LLC (default) | S-corp-elected LLC | C-corp |
|---|---|---|---|
| Federal tax | Pass-through (no entity tax) | Pass-through; salary portion is wages | 21% corporate tax + dividend tax (double taxation) |
| Self-employment tax | 15.3% on full net income | Only on salary portion | Owner is W-2 employee — payroll tax on wages only |
| Owner residency | Any (US or non-resident) | US citizens/residents only | Any |
| Owner count | 1-unlimited | 1-100 US-person shareholders | 1-unlimited |
| Stock classes | Member units (flexible) | One class only | Multiple classes (common, preferred) |
| Anonymity (formation state) | Yes in WY, NM, DE, NV | Inherits LLC anonymity | Same as LLC formation rules |
| VC fundraising | Difficult (VCs prefer C-corp) | Same — VCs prefer C-corp | Standard — preferred by VCs |
| Stock-option plans | Profit interests (complex) | ISOs available | ISOs + NSOs available |
| Compliance burden | Lowest | Medium (payroll + Form 1120-S) | Highest (Form 1120 + board minutes) |
| Best for | Operators, bootstrappers, real-estate holders, non-residents | Profitable solo/small ops above $60k net | VC-track tech startups, multi-class equity structures |
S-corp is a tax election, not a separate entity type — an LLC can elect S-corp tax treatment via Form 2553. Most v4 Anonymousllc.co customers form a Wyoming LLC by default and elect S-corp later once income exceeds the break-even threshold. Non-residents cannot elect S-corp.
LLCs combine pass-through taxation (no entity-level tax) with flexibility (any number of members, any ownership-percentage allocation, member- or manager-managed). They suit bootstrap operators, real-estate holders, professional services, e-commerce, content creators, and consultants. Non-residents have no S-corp option, so LLC is the only flexible vehicle.
VC fundraising (institutional investors prefer Delaware C-corp). Stock-option compensation programs (ISOs require C-corp). Multi-class equity structures (common + preferred shares). QSBS eligibility (Section 1202 capital gains exclusion). Plans to go public or get acquired in stock-for-stock deal.
S-corp is a TAX ELECTION, not a separate entity. An LLC can elect S-corp tax treatment by filing Form 2553. Most v4 founders default to LLC (anonymity, flexibility) and add the S-corp election later once income justifies the payroll compliance cost.
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