None whatsoever. They both provide the same limited liability to its stockholders.
Many people think that because the S corporation is taxed as a proprietorship
or partnership, it has the unlimited liability characteristics of these
entities. Of course, that’s untrue. It is true that it is more problematic
to protect S corporation shares because these shares cannot be owned by
limited partnerships, trusts and most other protective entities. But as
we talked about earlier when we spoke about investments, we have several
options to shelter S corporation shares – and they ought to be protected.