As we always say, the way in which you structure your business is based off of your business and the needs of your specific business. Ideally, when most individuals start their business, they opt for a LLC because they believe it is better for their business and assume that they can get certain tax write-offs. This is completely false! There are no tax write-off's for a LLC. An LLC just protects and limits your company and its assets.
Moreover, an S-Corp is not a business entity like an LLC, but more so a tax elected status. Unlike an LLC entity in which there are no limit on the amount of members which can be under the LLC, an S-Corp only allows 100 share holders (members). LLC owners must pay self-employment taxes for all income. S-corp owners may pay less on this tax, provided they pay themselves a "reasonable salary." The tax liability of S-corp sole proprietorships or partnerships belongs to the members, or shareholders. An LLC may also file as an S-corp. LLC owners are usually managed by member of the LLC, however, if ran by managers and such, the LLC is then treated as a S-corp. Oh, lastly, share holders of S-Corp MUST be US residences while members of the LLC do not have to be.
In summation, choosing the right entity for your business is a decision that you must decide. For new entrepreneurs, an LLC might work best and then eventually you may want to switch as your business grows. Below is a chart showing the different business entities and how they differ. We hope this helps you decide on how you want to structure your business for success.