The Differences Between an LLC and a Corporation

Most “movers and shakers” need to pick between establishing a corporation (aka Inc.) or a limited liability company (aka LLC). 

This can be a tough decision, largely because it’s difficult to understand the differences (let alone which might benefit you more)!

What is an LLC?

An LLC, or limited liability company, is a legal business entity you form to protect your personal assets from liability.

It will also establish how your business income is treated come tax time. It’s not the only business entity that does this, though. It’s one of a handful. 

What is a corporation?

The other most common option is a corporation (aka a corp or Inc.). Corporations are another business entity that also provide liability protection. But, they are set up a little differently from an LLC.

They are an entirely separate entity from their owners, who hold ownership through shares (or stock) of the company. 

Choosing between the two will depend on your business type and its needs, as well as your own liability and tax planning goals.

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