Two SCorps, One LLC

I have an appt to talk to my tax guy, but he's a busy man and it's a few weeks out. In the meantime, I wanted to check if my understanding is correct.

So my partner and I both work in the freelance entertainment field. We each have SCorps that we are the solo owners of. We have created an LLC to run some projects through, with our individual selves listed as owners, not our SCorps. Are we correct that:

* We could invoice the LLC for our work from our SCorps, which would qualify as an LLC expense. * If we paid ourselves directly from the LLC, that would be seen as pass through income and subject to double taxation.

We would be billing the LLC for the same types of services that we currently bill other companies when we are hired. This structure looks to me that we are still paying our fair corporate taxes, just avoiding extra taxation. Is there any regulation we should be aware of with 2 business entities with the same owner doing business with each other?

EDIT 2: Assume I have run the numbers and see significant savings through this method, even considering having to file a few more forms and minimum fees.

EDIT: I appreciate the thoughts on the business structure, but I am curious about this from a regulatory position. Let me clarify a bit what I am asking by presenting a scenario.

* Bob and Bill each own an Scorp, Bob, Inc and Bill, Inc, each with its own stream of income and clients * X LLC is formed by Bob and Bill, who are the owners personally to allow for X to convert to an Scorp in the future. * X has a client who pays $20,000 for a service they provide. * X has $1000 in overhead expenses and Bob, Inc bills X $9500 for his services as a loanout, Bill, Inc does the same. * X is essentially at 0 after expenses, showing no profit at the end of the fiscal year to be passed through to the individual owners. * Bob, Inc pays Bob his reasonable salary and he takes his distributions as normal.

Is this considered above the board or are we flagging ourselves for penalties and audits?