1
Overview
An LLC and a corporation are different state-law structures. Both can provide liability separation when properly formed and maintained, but they differ in governance, ownership, tax options, and formalities.
2
Common LLC characteristics
- Flexible management
- No stock issuance
- Operating agreement governance
- Tax treatment depends on elections and number of owners
- Fewer traditional corporate formalities in many states
3
Common corporation characteristics
- Shares of stock can be issued
- Directors and officers have defined governance roles
- Meetings and records are generally more formal
- C or qualifying S corporation tax treatment
4
Choosing between them
Consider ownership plans, investors, tax treatment, management, professional licensing rules, and long-term growth before selecting a structure.