For several years, have operated a single person LLC in the same state using 1099s to augment staff, the 1099s are out of my state. All our work is 100% remote.
I'm considering moving states (leaving the LLC state I'm in) AND hire 2 people as w2s who are also out of state.
One of the w2s I need to give equity to. Both want salaries vs. distributions (I think).
My sense is now is the time for me to be looking at changing to an S Corp.
This means I'll need all new bank accounts and need to tell current clients a new EIN will be coming. It also means I'd need new insurance and new credit cards. When I hire w2s and use ADP, I'll need to set up the payroll with this structure.
My other sense is if I created a multi-person LLC right now and filed as an S Corp, I'd have to potentially do paperwork anyway once I move. And I'm taking audit risk by running a multi-person LLC. On the positive though, it would be less initial effort until I move out of state - no bank account changes, no credit card changes, no client notifications.
The tradeoff I see with an S corp is one of time to do all this paperwork - and it starts my business over (so not sure if that will impact any future debt funding early on as I have no track record of success in the S corp).
What am I missing in this assessment to move from an LLC to an S Corp?
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