Limited Liability Company (“LLC”) vs. Corporation (C-corps and S-corps)
The concept of the “corporation” dates all the way back to the Roman Empire. For our purposes, however, you should just remember that corporations and LLC’s share THREE important characteristics: (1) they both have a legal personality with legal rights and obligations, like people; (2) they may both be owned by multiple people (or in the case of LLC’s, other LLC’s) whose ownership is securitized as stock or membership; and (3) they both limit the liabilities of its owners, who can lose nothing more than the capital already invested.
One of the most important legal steps you’ll take is forming your own corporate entity, which will usually be either a corporation or an LLC. We’ll discuss the differences between them but it’s worth noting that that LLCs tend to be more favorable.