There's no right answer. You should probably talk to a CPA or attorney in your state about the pros and cons of each.
From an income tax point of view, a 2-member LLC will file a partnership return form 1065. As part of the 1065, each partner will get a K-1 statement that will report each partners share of income and expenses, and be reported on the partner's personal tax return (the partners do not file schedule C). Partners do not take a salary and are not employees.
(There is an exception if the only 2 members are spouses and you live in a community property state.)
Note that electing to have an LLC taxed as an S-corporation is not the same as forming an S-corporation.
Whether you have an LLC that elects to pay tax as an S-corp, or you form an actual S-corp, the biggest difference is that anyone who performs services for the S-corp must be paid a fair market wage on a W-2 that is subject to income tax and employment tax withholding , before any profits can be distributed, and this includes owners/shareholders/officers. The S-corp (or LLC taxed as S-corp) will file a tax return form 1120S, which also creates K-1 statements to shareholders to pass through income and expenses. But before any dividends or profits can go to the shareholders, anyone who provides material service to the S-corp must be paid a W-2 salary.
There are many other significant differences, including handling of losses.
See a professional to determine which structure is best for you.
