Is an LLC a Corporation (What’s the difference?)

Is an LLC a Corporation?

As a new business owner, chances are pretty good everyone and their brother has lined up to give you a piece of advice.

Don’t form an LLC, you want to form a corporation instead. Corporations are to complex, go with an LLC instead.

Sound familiar?

While all this advice can be helpful, it can also be confusing. One of the biggest questions new business owners and aspiring business owners email me at sam@mollaeilaw.com and ask is: is an LLC a corporation?

The answer is no. An LLC and a corporation are two different types of business entities.

It is up to you to look at the pros and cons of an LLC vs a corporation and decide which one is right for your business venture.

 

LLC vs. Corporation: What’s the Difference?

Apart from a sole proprietor, all other business organizations must register as a specific type of business such as a corporation, LLC, or partnership in the state the business is located in. As a new business owner trying to decide which one is right for you can be hard!

For starters, an LLC is formed with one or more owners referred to as members. A corporation is formed with a Board of Directors and shareholders.

One of the biggest differences between an LLC and a corporation is how they are taxed. One of the largest appeals in choosing to form an LLC over a corporation is avoiding the double taxation issue of being a corporation

Please feel free to shoot me an email at sam@mollaeilaw.com and we can look at your unique situation and decide which business structure is right for you together.

 

How Are Corporations and LLCs Similar?

While an LLC is not a corporation, the reason people get confused is because there are similarities between the two. Namely, they are similar because they limit the liability placed on owners, members, and shareholders if the business faces a lawsuit.

While some say an LLC offers less protection than a corporation, that is simply not true.

 

What To Do Next

A limited liability corporation is not a thing. When you form an LLC, you are forming a limited liability company, not a corporation.

While you must register both an LLC and a corporation with the state. You do not incorporate an LLC.

If you need assistance in choosing a business structure type and registering your business with the state, please contact me at sam@mollaeilaw.com. I’m an experienced business attorney and I can help you.

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