You can think of these as two different company structures with very different tax requirements. Whichever way you choose to go, you're going to look more legit than the other guys. So just take a minute to consider your short-and long-term business goals to figure out which structure is best for you.
Advantages and Disadvantages
A limited liability company is a type of business structure that offers personal liability protections and a few tax advantages to boot. The "LL" in LLC is what protects your personal assets in the event of a judgment against your company. Corporations offer limited liability as well, so we're going to focus on the structural and taxation differences in the chart below.
Advantages of an LLC
Advantages of a Corporation
No limit on the number of owners
May issue shares of stock to attract investors
Profit and loss are passed through to the owners' individual tax returns
Corporate income splitting may help lower overall tax liability
No annual meeting or minute book requirements
Disadvantages of an LLC
Disadvantages of a Corporation
Cannot engage in corporate income splitting to lower tax liability
C corp tax structure requires double taxation of corporate profits (s corp's does not)
Cannot issue stock
Must hold annual meetings and record minutes
S corporations have restrictions on the number of owners
LLC or Corporation: Which One Is Right for Me?
Business goals aren't one size fits all, and neither is incorporating. When deciding which kind of corporation fits your business strategy, consider some of the differences that each kind offers.
Learn More About Legal Business Structures
Regardless of which business structure you choose, incorporate.solutions can help you incorporate or form an LLC online or by phone in minutes.
