Comparison between an LLC and a Corporation (Inc)



An LLC is a ‘Limited Liability Company’ – it is not incorporated therefore it is not a corporation.

Limited Liability Company (LLC) 

  1. Limited Liability
  2. Formation: State files ‘Articles of Organization’
  3. Owners are called ‘Members’
  4. LLC has no Income Tax
  5. Members’ personal tax pays LLC tax (Form 1040 or 1040-SR)
  6. Members pay self-employment taxes

Corporation

  1. Limited Liability
  2. Formation: State files ‘Articles of Incorporation’
  3. Owners are called ‘Shareholders’
  4. Corporation pays Income Tax
  5. Shareholders pay tax based on dividends
  6. Shareholders do not pay self-employment tax

 

 

LLC Guide

LLC Name
Steps To Setup LLC
LLC vs INC