LLC vs S Corp: Which Is Better for Your Assisted Living Business?

asset protection assisted living assisted living business assisted living entity setup assisted living startup assisted living tax benefits business structure for assisted living llc vs s corp ral residential assisted living Aug 22, 2025

Starting an assisted living business is exciting—but it comes with lots of decisions. One of the biggest is figuring out your business structure. Should you go with an LLC or an S Corporation (S Corp)?

If you’re scratching your head over this, you’re not alone. This guide breaks down the basics so you can choose the best fit for your assisted living business. Let’s dive in! 🚀

Check out this video, too: 

Why Your Business Structure Matters

Choosing the right structure protects your personal assets and can save you money on taxes. But remember, every situation is unique! Always talk to an attorney and accountant about what’s best for your situation.

LLC Basics: Simple & Flexible

An LLC (Limited Liability Company) is a popular choice because it’s easy to set up and manage.

Here’s what you should know about LLCs:
✅ Flexible management and fewer formalities
✅ Pass-through taxation—business income passes directly to you
✅ You pay self-employment taxes on all profits

LLCs are great when you want simplicity and personal asset protection without complex rules.

S Corp Basics: Tax Savings for Growing Businesses

An S Corp isn’t a different type of entity (it's still essentially an LLC), but it's a different tax status you can elect for your LLC. It can (in certain situations) help save money on taxes if your business income is steady and high enough.

Here’s how S Corps work:
✅ Pass-through taxation with a twist—pay yourself a salary and take additional profits as distributions
✅ Salary is subject to self-employment taxes, distributions usually are not
✅ Requires more formalities and paperwork than LLCs

When Does S Corp Make Sense?

Let’s look at a simple example:

If your assisted living business pays you $100,000:

  • As an LLC, with a 30% tax rate, you might pay around $30,000 in self-employment taxes on the whole amount.

  • As an S Corp, you pay self-employment taxes on your salary (say $40,000) but pay less tax on the rest ($60,000 distributions), saving roughly $6,000.

That’s a simplified example, so make sure to talk with your accountant to see what is best for your scenario.

Asset Protection: Why It’s Critical

Both LLCs and S Corps protect your personal assets—your home, savings, and retirement accounts—from business liabilities.

In assisted living, this is key because accidents can happen. Keeping your business and personal assets separate protects you from lawsuits and financial risks.

Smart Tip: Use Multiple Entities to Protect & Grow

Many owners separate their real estate and business operations:
🏠 One LLC owns the property
🏢 Another LLC or S Corp runs the assisted living operations
📄 They sign a lease agreement between these entities

This separation adds protection and can help with tax strategies as your business grows.

Grab my free lease agreement template to help set this up.

Advanced Strategy: Holding Company Setup

As you expand, some owners create a parent holding company (LLC or S Corp) that owns all other entities.

This approach:
✅ Simplifies management
✅ Provides extra asset protection
✅ May offer tax advantages

This is a more complex setup, so get advice from your attorney and accountant before you implement this type of strategy.

What Should You Do Next?

There’s no one right answer for everyone. Your best choice depends on your income, growth plans, and personal goals.

Make sure you:
✅ Consult with an attorney and accountant
✅ Review your income and business goals
✅ Understand the tax and legal implications

How I Can Help You Launch Your Assisted Living Business

Feeling overwhelmed? Don’t worry—you don’t have to figure this out alone!

Got questions? Drop them in the comments below! ⬇️

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