An LLC is a state-law business entity, while “S corporation” generally describes a federal tax status rather than a separate state-law entity type. An eligible LLC may elect S corporation tax treatment while remaining an LLC under state law.

An S corporation should be explained as a federal tax classification rather than simply another state entity type. A qualifying corporation or LLC can seek S corporation tax treatment by making the required federal election. The entity must satisfy eligibility rules, and the underlying state-law entity continues to exist as the corporation or LLC that was formed with the state.