The Difference Between An LLC And A Corporation

When it comes to forming your new enterprise, there are a lot of different documents that you have to fill out before you can become legal in the eyes of the IRS. The first and most important thing you have to do is determine the kind of entity you want your business to be.

LLC vs. Corporation

Usually, small business owners will compare LLC vs. Corporation, but how do they stack up against each other? Let’s go over some important metrics to find out.


One of the benefits of starting an LLC or corporation is that the company is separated from your personal assets, including things like debt. This means that you cannot be held accountable for bills that are tied to the business, and it allows you to declare bankruptcy without it affecting your standing.


An LLC is formed with founding members, and its entire existence is tied to them. Therefore, if one of the members decides to leave the company for any reason, the LLC dissolves with them, and you have to restructure accordingly. A corporation, however, is a separate legal entity, which means that it exists outside of any founding members and can stay intact with or without their involvement.


LLCs have a rare distinction because they get to decide if they want to be taxed like a partnership or a corporation. With the former option, each member is personally tied to the business’ finances. In the latter situation, they are considered separate. A corporation can be taxed on both the profits and salaries unless it is regarded as an S- Corp, which uses “pass-through” taxation.


A corporation has to be structured a particular way, with a board of directors running the show, and a CEO managing the operations and executive decisions. LLCs, on the other hand, can be controlled however the founding members wish, and an owner of the company can also manage without any distinction between classifications.

Bottom Line

You should be interested in LLC online filing if you want more flexibility in how you structure and run your business. Otherwise, a corporation has much more stability and will be better for a long-term enterprise.

There is no right or wrong in your choice.  However, either LLC or corporation can be the best legal structure for your business depending on your business model, operations, growth/expansion plan and several other factors.  Consult with your trusted lawyer for the best route to take.


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