Short answer. Both give you pass-through taxation and limited liability. The split is ownership: an S corp can only be owned by individuals, so a trust or a holding company cannot sit on the cap table. For holding assets, Jake favors an LLC. For an operating business you may want to sell or issue options in, the S corp earns its place.
S corp vs LLC: where they actually differ
| LLC | S corp | |
|---|---|---|
| Pass-through taxation | Yes | Yes |
| Limited liability | Yes | Yes |
| Ownership interest | Equity units | Stock |
| Can a trust or company own it? | Yes | No, individuals only |
| Issue options, run an ESOP | Harder | Yes |
| If a creditor wins a judgment | Equity units limit what they reach | They can take the stock |
| Jake's use case | Holding assets | An operating business |
Why the ownership rule decides most of it
The constraint Jake keeps returning to is who is allowed to own the thing. An S corp cannot be owned by a C corporation, and it cannot be owned by a trust in the ordinary case. The IRS sets these eligibility rules: shareholders must be individuals, certain trusts, or estates, and there is a 100-shareholder cap. The full list is on the IRS S corporations page.
That single rule cascades. If you want a holding company above the entity, or a trust holding it for estate purposes, the S corp is out before you have considered anything else. An LLC has no such restriction.
What happens when a creditor comes after you
This is the difference Jake treats as decisive for anyone holding assets rather than running an operating business. His description: if a creditor reaches an S corp, they can take control of the stock, liquidate what is inside, pay themselves back, "and then give you the worthless shares." With an LLC, the equity-unit structure is designed to stop that.
Most of the time when you're holding assets, you want to use an LLC here in the US.
Jake Claver, QFOP, recorded January 2026
Why Jake uses Wyoming
He forms Wyoming LLCs, and gives three reasons: charging-order protection, no state income tax, and digital-asset regulation he considers the most developed of any state. Wyoming's charging-order provisions sit in the Wyoming Limited Liability Company Act, Wyo. Stat. Title 17, Chapter 29, and the absence of a personal income tax is confirmed by the Wyoming Department of Revenue.
Common questions
Can a trust own an S corp?
Only certain trusts qualify, which is why Jake treats the S corp as unsuitable when a trust needs to sit above the entity. The IRS page linked above lists the eligible shareholder types.
When is an S corp the better choice?
When you are running a real operating business you may want to sell, or where you need to issue options or run an ESOP. Jake's words: they "tend to be better for actual functioning businesses."
Is one of them safer?
Not in general. His framing is that both are tools: "You just need to understand how the tools work together and what they're used for and the drawbacks or benefits to using them in different applications."
This page summarizes recorded commentary and general information. It is not investment, tax, or legal advice, and it is not a recommendation to buy or sell any asset or to form any entity. Nothing here accounts for your situation. Speak to a qualified professional before acting.