Included in this section are individual articles relating to corporations and limited liability companies (“LLCs”). After reading both articles, a person might question whether the establishment of a corporation or an LLC would be more advantageous for them.
When talking about the difference between corporations and LLCs, we are usually talking about the difference between and S-Corporation and an LLC. Since C-Corporations, S-Corporations and LLCs all provide for limited liability, the major distinction between the three is how they are taxed. A C-Corporation is taxed usually at the entity level; whereas, S-Corporations and LLCs are usually taxed at the individual owner level. Therefore, when discussing a business entity choice between an LLC and a corporation, we are really discussing the choice between an LLC and an S-Corporation. If a C-Corporation better fits a business situation, it is usually preferable to any form of LLC that involves an entity level tax.
First, the area of business entity choice is a specific area where the aid of an attorney is essential. Attorney expertise and experience in these areas is essential in helping a person decide which business entity choice is right for them. However, as a way of helping of the person see some of the advantages and disadvantages to each type of business entity, the following may be used to help decide which business entity would be preferable.