Depends on the economics of the business, and your appetite for liability risk......

Economics

If the business will require substantial capital on an ongoing basis.......ie need to leave earnings in the business, as compared to being able to take out a substantial amount for fast cars and candy bars..........then need a structure that recognizes that retention problem.

Liability

If the business is risky, in terms of law suits, then need some kind of additional layer of legal insulation.

Ownership

If a business is to be on ongoing entity, in and of itself, such as a retail business with an inventory..........as compared to merely a joint venture such as owning a 40 acres together.........then multiple ownership typically is best handled thru a legal entity such as a corp or LLC.......ie, one that has definite boundary lines of structure.  A partnership, for example, has real fuzzy boundary lines, and typically needs a lot of documents to protect one partner from the other.

LLC

An LLC is useless as on ongoing operating entity.  Reason--- taxed as a partnership, or if single member, then taxed as if the legal entity did not exist.

LLC does provide an element of legal protection.........and does provide some insulation against one partner causing problems for the other.

LLC is typically used for a temporary joint venture, to hold real estate, or where the tax considerations are nominal.

If the member(s) are not corporations, then the earnings would be taxed as self employed income---- if operating.  If rents, etc from say, real estate, then would be taxed as such, not subject to self employment tax.

Putting farm land into an LLC, and renting that back to an entity in which the LLC member (individual) is an active participant in the production on that land, still subjects the rent to self employment tax (Section 1402).

S corp

Provides corporate insulation with respect to liabilities.

Is worthless as a structure for an operating entity.

The concept of paying oneself a small salary, and taking the rest of the earnings out as "dividends" not subject to self employment taxes-------- is precarious at best.  IRS has this issue in the top ten hit list.........and there are many, many, many court cases on the issue, with the taxpayer losing 9:1, or worse.

It is being done.....granted........but that merely means that taxpayer's turn has not come up yet.  Typical recommendation by attorneys and accountants who do not spend a lot of time in tax.

No employee benefits, since for purposes of "employee benefits", S corps have to follow the partnership rules.

Use an S corp when needing to convert self employment income into non self employment income.......... coupled with retaining the capacity for keeping capital gains characteristics for assets.

Example......... S corp would own farm land, which is rented to C corp.  The rent paid by the C corp would NOT be subject to section 1402 because a corp cannot be subjected to self employment tax on its income.  So, when that income is passed thru to the shareholder's return, it is not subjected to SE tax.

However, if that land is sold by the S corp, the gains are passed thru to the shareholder as gains from sale of Sec 1250 property, and therefore retains taxation at the shareholder level as gains subject to capital gains rates.

Rule of thumb..........MUST have a specific reason for using an S corp.

C corps

EE benefits are allowed to any employee, including shareholders who are also employees.  Therefore such things as meals and lodging deductions (sec 119) are allowed.

Liability protection exists.

Money taken out of the corp has to be styled in one of three ways------- as a loan, which has to be eventually paid back just as anyother loan..........as earnings, to be taxed as such, such as via a W-2, but which is a deduction to the corp...........or as a dividend, which is taxed as ordinary income to the shareholder and is NOT deducted by the corp as expense.

Harder to get out of the C corp without "double taxation"........but the rules are straightforward, and anyone having elementary tax knowledge ought to be able to set things up so that over a period of say, 2--3 years before liquidation, the earnings that would be left in the corp and subject to "double taxation" would be nominal.

C corp pays its own taxes, and therefore has its own set of tax brackets.  That is best for situation where earnings need to be retained in the business, as internal financing......such as having to build an inventory, or buy assets such as farm machinery, whose purchase price is high, and whose economic benefits cover several operating cycles.

Rule of thumb...........must have a specific reason for NOT using the C corp, if the element of liability, plus retention of capital, has already been established.

Bookkeeping

The bookkeeping requirement is the same for any of the entities.

Any time there is ownership of assets by a separate entity, and therefore that entity might be called upon to provide specific basis information, such as when filing a tax return that includes a termination of the entity.......need to be able to produce a balance sheet that is the result of mathematical accumulative entries.......as compared to pulling numbers out of one's backside, such as is done for a banker.

We will not touch a tax return that has an entity involved, unless we know FACTUALLY that there is a sufficient balance sheet that can be produced...........too many ripple effects if something goes haywire.