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Home Insights Jurisdiction Update What is a different between LLC vs Corporation, S-corp, C-Corp?

What is a different between LLC vs Corporation, S-corp, C-Corp?

Updated time: 11 Jan, 2019, 18:09 (UTC+08:00)

	Limited Liability Company (LLC)	General Corporation	S-Corporation	C-Corporation
Formation	Delaware State filing	Delaware State filing	Delaware State filing. Within 75 days of formation, IRS filing of Subchapter S election is required	Delaware State filing. Within 75 days of formation, Form 2553 required to be filed with the IRS
Liability	Typically, members not personally liable for the debts of the LLC	Typically, shareholders not personally liable for the debts of the corporation	Typically, shareholders are not personally liable for debts of the corporation	Typically, shareholders are not personally liable for debts of the corporation
Raising Capital	Potential to sell interests, contingent upon Operating Agreement restrictions	Shares of stock are usually sold to raise capital	Shares of stock are usually sold to raise capital	Shares of stock are usually sold to raise capital. Venture capitalists and angel investors are typically a good source of funding
Taxation	Not taxed at entity level if properly structured. Profit/loss passed through directly to the members	Taxed at the entity level and shareholders receiving dividends are taxed at the individual level	Not taxed at the entity level. Shareholders are taxed at the individual level for profit/loss	Fringe benefits and owners' salaries can be deducted as business expenses. Shareholders may face double taxation
Formalities	Less formal meetings and minutes are required; state reporting required	Board of Directors, formal meetings, minutes and annual state reports required	Board of Directors, formal meetings, minutes and annual state reports required	Board of Directors, formal meetings, minutes and annual state reports required
Management	Members have an Operating Agreement that outlines management responsibilities	Shareholders elect Board of Directors to appoint officers for day-to-day management	Shareholders elect Board of Directors to appoint officers for day-to-day management	Shareholders elect Board of Directors to appoint officers for day-to-day management
Existence	Perpetual unless otherwise specified	Perpetual unless otherwise specified	Perpetual unless otherwise specified	Perpetual unless otherwise specified
Transferability	Contingent upon Operating Agreement restrictions	Shares of stock are easily transferred	Shares of stock easily transferred after observing all IRS regulations and ownership requirements	Restrictions on transferring shares of stock.

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