If you are thinking about starting your own business, one of the first steps you must take is figuring out which type of company your business will be. Both LLCs and corporations are viable options, and both have benefits and drawbacks. Some of the key differences fall under categories such as formation and ownership, as well as taxes and management. Once you figure out which type of company is right for you, you can be on your way to forming your business.
Limited Liability Companies
LLC is a commonly-used abbreviation for a limited liability company. It is a legal entity that can hold real estate or other appreciating assets.
Formation and Ownership
A LLC is formed by an individual or a group of people who are the owners of the company. The owners are referred to as members, and they file Articles of Organization and come up with an Operating Agreement. Each member owns a certain percentage of the company. An ownership stake in a LLC is typically more difficult to transfer to a new owner than shares of a corporation, but a LLC’s operating agreement will usually specify how ownership interests can be transferred....