Corporations and LLCs can be a wide range of enterprises ranging from industrial operations, to retail businesses, to professional practices like accounting, medicine, and law. While both corporations and LLCs provide limited liability to their owners, they still have many differences.
A corporation is essentially a legal “person” It can participate in many of the same legal transactions as an actual person could, like getting a loan, buying and selling property, and getting sued and suing. One or more shareholders typically own a corporation. These shareholders can be individuals, groups, or other corporations or LLCs. Corporations are run by a Board of Directors who are elected by the shareholders.
A limited liability company is also a legal “person”. However it differs from a corporation because members who have member interest in the LLC govern it. Profits and losses are passed through to the members depending on their membership share.
Which is right for your company?
Smaller businesses often find that an LLC’s simplicity and flexibility is a good fit for them. An LLC can help you avoid from being double taxed if the business is going to buy/own property. However, if you expect to have many investors in your business, you should expect to provide owners with benefits, or if you want to retain good employees, a corporation might be the right choice for you.
There are many more factors to consider when choosing between a corporation and LLC. A corporation and LLC attorney can help you further to discover the pros and cons of each entity. The lawyers at O’Keeffe O’Brien Lyson Attorneys can help you choose your entity, and form your North Dakota or Minnesota corporation or LLC. Contact or call O’Keeffe O’Brien Lyson Attorneys today to set up your appointment with an experience business law attorney and get the process started. Call 701-235-8000.