What is the difference between an LLC and an S Corp?

Searches like what is an S corp vs LLC, what is difference between S corp and LLC, or what are the differences between LLC and S corp mix entity type with tax election. An LLC is a state-law business structure with flexible management. An S corporation is a federal tax classification under the Internal Revenue Code—not mutually exclusive: an LLC can elect S corp taxation. ^[1][2][3] LLC basics Owners are members; default tax may be pass-through (partnership or disregarded entity). S corp election To be an S corp, the entity must meet eligibility rules (domestic, allowable shareholders, one class of stock, etc.). ^[1] Some businesses use S corp status to reduce self-employment tax by paying reasonable wages plus distributions—IRS scrutinizes reasonable compensation. ^[2] Which fits High active income businesses sometimes benefit from S corp tax planning; simple small businesses often stay LLC only. Consult a CPA. ^[2][3]