LLC vs. S-Corp vs. C-Corp — Which One for Your Hustle?
TL;DR:
Choosing the right business structure isn’t just paperwork—it’s a wealth decision. Whether you’re a solo real estate investor or scaling your first business, the difference between LLC, S-Corp, and C-Corp could mean tens of thousands in tax savings, asset protection, and funding flexibility.
In this guide, you’ll learn:
• The real-world pros and cons of LLCs, S-Corps, and C-Corps
• Which entity is best for your real estate or entrepreneurial goals
• How to structure your hustle for long-term wealth and legal protection
Starting a Business in 2025? Choose Smart From Day One
Ever feel overwhelmed trying to pick the “right” business entity? You’re not alone.
Whether you're flipping homes, managing rentals, freelancing, or launching a side hustle, your legal structure can affect:
How much you pay in taxes
Your personal liability
Your ability to raise capital
Your long-term exit or wealth strategy
At Zaza Living, we’ve seen too many entrepreneurs and investors pay the price for picking the wrong structure—or worse, never choosing one at all.
Let’s break down your options.
What Is an LLC (Limited Liability Company)?
LLC = simplicity + protection.
It’s one of the most flexible and popular entity types, especially for:
Real estate investors
Freelancers
Consultants
Small business owners
Benefits of an LLC:
Pass-through taxation (profits taxed only once via your personal return)
Limited liability protection (separates your business from personal assets)
Minimal paperwork and easy maintenance
Can be owned by one person or multiple members
Downsides:
Not ideal if you plan to raise venture capital
Self-employment tax applies unless taxed as an S-Corp
✅ Takeaway: LLCs are great for getting started and protecting your assets—but may need extra strategy for tax optimization.
What Is an S-Corp?
An S-Corp is not a business entity you form—it’s a tax election you apply to an LLC or corporation. It’s perfect for those who are generating consistent income and want to reduce self-employment tax.
Why real estate pros and entrepreneurs choose it:
You only pay self-employment tax on your salary, not all profits
You can take distributions (profit payouts) that aren’t taxed as heavily
Keeps your liability protection if you're an LLC electing S-Corp status
Requirements:
Must pay yourself a “reasonable salary”
More IRS oversight (you’ll need payroll, bookkeeping, etc.)
Limited to 100 shareholders (all U.S. citizens or residents)
✅ Tip: If your business is making $50K+ net profit, it might be time to talk to a CPA about switching to an S-Corp for tax savings.
What Is a C-Corp?
C-Corps are full corporations—think big brands like Apple, Tesla, or your future empire.
But they’re not just for billion-dollar companies. Many entrepreneurs and investors use C-Corps strategically when they need:
Unlimited shareholders (including foreign owners)
Access to venture capital or issuing stock
Full fringe benefits like health insurance, retirement plans, and more
Pros:
Easier to raise funding from investors
Can retain earnings and reinvest without immediate tax
Strong legal structure with continuity
Cons:
Double taxation (once on profits, again on dividends)
More complex compliance (board meetings, corporate minutes, etc.)
Not ideal for most solo businesses or early-stage hustles
✅ Takeaway: C-Corps are a long-term play. Best if you're raising capital, building a team, or want a clean exit strategy.
Quick Comparison Breakdown
LLC
• Tax Type: Pass-through
• Owner Type: Individuals, entities
• Self-Employment Tax: Yes (on full profits)
• Complexity: Low
• Fundraising: Limited
• Best For: Small businesses, real estate investors
S-Corp
• Tax Type: Pass-through (with salary + distributions)
• Owner Type: U.S. citizens/residents only
• Self-Employment Tax: Reduced (on salary only)
• Complexity: Medium
• Fundraising: Limited
• Best For: Mid-stage hustles with steady profit
C-Corp
• Tax Type: Double taxed (corporate + dividends)
• Owner Type: Any (including foreign investors)
• Self-Employment Tax: None
• Complexity: High
• Fundraising: Ideal for outside capital and stock issuance
• Best For: High-growth startups or businesses planning to raise investment
Real-World Scenarios
1. Real Estate Investor (LLC)
You’re buying your first rental. You create an LLC to separate the property from your personal finances. It’s taxed pass-through, and you write off expenses like repairs, insurance, and depreciation.
2. Consultant with Consistent Income (S-Corp)
You’re earning $100K/year. You convert your LLC to an S-Corp, pay yourself $60K in salary, and take $40K in distributions—saving thousands in self-employment taxes.
3. Tech Startup Founder (C-Corp)
You plan to raise money from angel investors. You choose a C-Corp to issue equity and retain earnings. Eventually, you qualify for Section 1202 stock and reduce capital gains tax when exiting.
Still Not Sure Which One to Choose?
Choosing the right business entity isn’t one-size-fits-all—it depends on your goals, income, risk tolerance, and how hands-on you want to be with taxes and compliance.
If you’re feeling stuck, here’s what we recommend:
Talk to a qualified CPA or business attorney — They can break down how each structure fits your current and future plans.
Think about scalability — What works for your side hustle today might not be ideal once you grow or add partners.
Start simple, then evolve — Many entrepreneurs begin as an LLC and later elect S-Corp status as revenue increases.
💬 Need help navigating your setup from a real estate and investment lens? Our team at Zaza Living can point you toward resources and professionals we trust.
Choosing the Right Entity: What Really Matters
Ask yourself:
Will I have partners or investors?
Do I want to reduce my taxes now or focus on future funding?
Am I planning to grow this hustle into a large company—or keep it lean?
What’s my end game? (Cash flow? Exit? Asset protection?)
At Zaza Living, we guide entrepreneurs, investors, and side-hustlers through these decisions—so you don’t have to guess your way through it.
✅ Tip: Start with an LLC. You can always elect S-Corp status or convert later if your business grows.
Final Thoughts
Your entity type is more than a form—it’s a foundation for wealth, protection, and growth.
Here’s what we recommend:
LLC if you’re just starting or investing in real estate
S-Corp if you're making regular profits and want to optimize taxes
C-Corp if you’re going big, building a brand, or raising funds
Want personalized guidance? We’ve helped dozens of founders and investors choose the right path—and we’re here for you.
👉 Book a free consultation with the Zaza Living team
Let’s build your hustle on solid ground.
