Best Business Structure: LLC or Corporation?
Corporations and LLCs are both excellent choices for business owners looking to minimize their personal liability and build greater credibility. But each entity also offers distinct tax and business advantages. Choosing the best one depends on the specific needs of your business.
Corporations offer personal liability protection, tax savings, and increased opportunities for raising capital. Corporations are also required to perform certain formalities such as holding annual meetings and keeping detailed corporate records (minutes). You can choose to incorporate as either a C or S corporation.
Limited Liability Companies (LLCs) offer the same personal liability protection as a corporation, but with fewer of the corporate formalities. They typically are not required to hold formal meetings or keep detailed corporate minutes. LLCs also offer great tax flexibility. Members can choose to be taxed as either a traditional corporation or as a “pass-through” entity.
To help you decide which business structure is best for you, check out this detailed comparison chart provided by LegalZoom.