What is the difference between a Corporation and a Limited Liability Company (LLC)?
Like a Corporation, an LLC offers limited liability to its owners. Unlike a Corporation, however, an LLC is taxed as a Partnership or Sole Proprietorship (unless the LLC elects to be taxed as a Corporation). This allows an LLC to pass all its income and losses through to the owners. Furthermore, the LLC has an advantage over a C-Corporation which makes an S-Corporation tax election because the S-Corporation can only have 100 stockholders and the stockholders cannot be Corporations or non-U.S. citizens.
A LLC offers limited liability to its owners, but is taxed as a partnership or sole proprietorship which passes all the income and losses through to its owners unless it elects to be taxed as a corporation. The LLC has an advantage over a C Corporation which makes an S Corporation tax election because the S Corporation can only have 75 stockholders and the stockholders cannot be corporations or non-U.S. citizens.
