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What is the difference between an LLC and a Corporation?

Last updated Friday, February 12, 2021

 

The main difference between an LLC and a corporation is that an LLC is owned by one or more individuals, and a corporation is owned by its shareholders. Both entities offer tremendous benefits to your business. Incorporating a business allows you to establish credibility and professionalism. It also provides limited liability protection.

 

Corporations have been in existence since the start of U.S. history. Because of this, a corporation as an entity has matured and developed to the point where the laws have become uniform. United States courts have centuries of law history cases to help resolve disputes and issues related to corporations. This creates significant legal stability for corporations.

 

Limited Liability Companies are still considered to be relatively new. Their entity was first recognized in the 1970s as the offspring of both the corporate and sole proprietorship/partnership form. Due to this dual nature, an LLC takes on the characteristics of both legal entities. However, as a result of being a new legal entity and having characteristics of both a corporation and partnership, states differ in their treatment of LLCs.

 

 

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© 2021 Marc Gohres

Revised February 12, 2021 8:08 AM

 

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