Differences between an LLC and an Inc.

Thank you Bhavini Mistry again for your thorough research and contribution to this article.
In the business world, there are two main types of businesses a company can become which are either a limited liability company (LLC) or a corporation (Inc). Limited liability companies (LLC) are formed by one or more owners and is seen as a “pass-through” business by how the income or losses of the LLC company are sent through the owners that own the company. On the other hand, corporations are seen as “separate business entities” and have a board of directors or higher authority that see through these gains and losses which can bed taxed to the corporation but not the shareholders.
The main difference between the two can be the complexity of their structure, how they can be taxed, LLC companies can be taxed based on the owners’ adjusted gross income whereas corporations can be taxed at a fixed corporate rate.
If it’s convenient for the business, a LLCs can choose to be taxed as a corporation. LLCs distribute the share of profits gained from the company each year and pay a self-employment tax. Corporations have shares, like those companies you hear on TV from Wall Street. Within certain limitations those shares, even from a local mom and pop Corporation, can be bought and sold. When choosing what structure to choose you must think in terms of the future of your company. Shares of stock represent ownership in the corporation, and can be a tool for raising money to finance the operation of the corporation. If you plan to have a single (yourself) or small circle of owners or investors in your company, and do not expect to go around raising money regularly, an LLC may be a simple structure for you. Always consult with a qualified attorney. If you have any questions feel free to call me for a quick consultation at 602 317 0035.