Is an LLC a Corporation?
Is an LLC a corporation? The short answer is no. A LLC is a limited liability company that can be taxed one of two ways.
One of the major differences is that with a LLC you can elect to be taxed as either a corporation or a partnership.
With a corporation, you can elect to be taxed as a corporation or you can elect to be treated as a Subchapter S corporation which passes through corporation income to the shareholders.
Please seek the counsel of an accountant before you make your decision.
Corporation vs. Limited Liability Company
- Both offer similar Liability Protection for owners/investors.
- S-Corporations and LLCs are both eligible to "pass through" profits and losses to the owner's personal income tax return (at personal income tax rates), to avoid "double taxation".
- Delaware Corporations must name one officer and the board of directors on the Delaware Annual Report which is Public Record.
- Owners/Shareholders are not named.
- Delaware LLCs do not file Delaware Annual Reports.
- Delaware Corporations can raise capital through private sales to investors or may be listed to be publicly traded on a stock exchange (subject to securities regulations).
- Delaware LLCs can raise capital by selling shares to investors, but cannot be publicly traded on a stock exchange.
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