LLC vs Corporation

Difference Between LLC and Corporation

LLC means Limited Liability Company which is a kind of company in United States corporate Structure where the owners of the entity are not personally liable for the Entity’s debt and that can also combine the partnership and sole proprietorship features whereas Corporation is macro in nature which consists of a group of companies so as to act as one entity and recognized legally with a wider meaning.

Choosing the right form of business is one of the many important decisions that are required to be taken by the Entrepreneur. Among the notable form of businesses are Sole Proprietorship, Partnership, Corporation, LLC, etc. These different forms offer their own benefits and shortcomings which are required to be assessed before a decision is to be made.

What is a Limited Liability Company (LLC)?

Limited Liability Company (LLC) is a new-age form of business that combines the privileges of both a partnership firm and a company form of business. This form of business limits the liability of the members and separates the debts held by the business. In other words, members of an LLC aren’t held personally liable for the debts of the business.

You are free to use this image on your website, templates etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: LLC vs Corporation (

What is a Corporation?

A corporation is a type of Legal Entity having a separate legal status which is different from its owners and is a more suitable form of business for Large Enterprises. It is an extensive complicated form of business as it requires a lot of record-keeping pertaining to accounting, taxation and compliance formalities.

Corporations usually have the word ‘Incorporated’ to their end name. Examples include Amazon Inc, Facebook Inc, etc. The owners of the corporation are known as shareholders and they elect the board of directors who is responsible for the overall policy-making and decision framework of the Corporation. Popular types re:

Corporation vs LLC Infographics

Let’s see the top differences between corporation vs LLC.

You are free to use this image on your website, templates etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: LLC vs Corporation (

Key Differences

The key differences are as follows –

Corporation vs LLC Comparative Table

BasisCorporationLimited Liability Company (LLC)
MeaningIt indicates a business entity that is registered as per the law of the country (e.g Corporation incorporated in India is registered under Companies Act 2013). It is often denoted with an abbreviated “Inc.” after the company name. (Example: Facebook Inc.)It is a hybrid form of business that provides the privileges of both partnership and company form of business. It is often denoted with an abbreviated “LLC” after the company name. (Example: Chrysler LLC)
Ownership StatusThe Owners of a Corporation are called ShareholdersThe owners of an LLC are called Members
Minimum RequirementTwo or more ShareholdersOne or more Members
Legal Formalities and ComplianceIt requires extensive record-keeping and Compliance procedure to fulfil under this form of businessVery less in comparison to a corporation
Conduct an Annual General Meeting and Filing of Annual ReportsCorporation are required to conduct Annual General Meeting and file Annual reports with the Appropriate Authority  (For example In India its is Registrar of Companies under Ministry of Corporate Affairs)Conducting AGM is optional and the annual reportAnnual ReportAn annual report is a document that a corporation publishes for its internal and external stakeholders to describe the company's performance, financial information, and disclosures related to its operations. Over time, these reports have become legal and regulatory more is not required to file.
ExistenceIt is a going concern and is not affected by the death or ceasing of any shareholders and continues till perpetuity.Limited Liability Company cannot exist until perpetuity. It has a limited life and it ceases to exist and needs to be dissolved upon death or bankruptcy of its members or if any member leaves the organization.
SuitabilityA corporation is ideal for a business that prefers having outside investors or Listing ambitions as the ownership to shareholders is in the form of Corporate Shares which are easily transferable.LLC members hold a certain percentage of the business entity and it is difficult to transfer the same, unlike Corporation.
Tax StructureIt results in Double Taxation (C Corp)It provides a Pass-through taxation feature as the income is taxed in the hands of Members.


Both form of business offers their unique benefits along with certain similarities. Choosing one form over the other depends upon the entrepreneur as all the legal formalities before and after the set up of business lies in the form itself and cost-benefit must be done before choosing between the two to ensure business goals are achieved in the best possible manner.

Recommended Articles

This has been a guide to LLC vs Corporation. Here we discuss the top differences between them along with infographics and comparative table. You may also have a look at the following articles –

Reader Interactions

Leave a Reply

Your email address will not be published. Required fields are marked *