The latest statistics show an estimated 32.5 million small businesses exist in America. If you run one of those businesses, you already know how many different decisions you must make to keep your company afloat.

Among those decisions is how to organize your business. If you know about LLC vs corporation issues, you’ll know how to get the right fit for your company.

So what’s the difference between an LLC and a corporation? Many people get this question wrong, but you won’t be if you read more of this guide.

What Is an LLC?

What Is an LLC

An LLC is a legal entity that provides limited liability protection to its owners. LLCs are easy to form and have flexible ownership structures.

What Is a Corporation?

A corporation is a legal entity that is separate from its owners. A corporation is owned by shareholders and overseen by a board of directors, but it is also subject to double taxation.

Key Differences

LLCs are typically much simpler to manage than corporations. For example, LLCs donโ€™t have to hold formal meetings or keep detailed minutes, and thereโ€™s less paperwork involved in setting up and maintaining an LLC. Corporations also tend to be more expensive to operate than LLCs.

Some of the benefits of an LLC over a corporation is that LLC owners are not personally liable for the debts and obligations of the LLC. This is called โ€œlimited liability,โ€ and itโ€™s a major reason why many businesses choose to organize as LLCs. In contrast, the owners of a corporation are personally liable for the debts and obligations of the corporation.


Another key difference between LLCs and corporations is how theyโ€™re taxed. LLCs can choose to be taxed as corporations, but they donโ€™t have to be. LLCs can also choose to be taxed as partnerships or sole proprietorships. This flexibility is one of the major tax advantages of an LLC over a corporation.

Pros and Cons of Forming an LLC vs Corporation

Forming an LLC is simpler and is more flexible to operate than corporations, but they can be more expensive to form, click here to learn more.

On the other hand, corporations offer greater personal liability protection and can be less expensive to form than LLCs, but they are more complex to operate. When it comes to choosing how to form a corporation vs LLC, it’s important to consider your business’s needs and goals.

Difference between LLC & Corporation

Decide if an LLC vs Corporation Is Right for Your Business

So, between LLC vs corporation, which is right for your business? If you’re looking for more flexibility, an LLC may be the way to go. If you’re looking for more protection, a corporation may be a better option.

If you’re not sure which business structure is right for you, it’s a good idea to speak with an experienced business attorney. They can help you weigh the pros and cons of each option and make the best decision for your business.

Don’t forget to check out more posts on business topics.

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