The Articles of Organization are pretty quick and painless, and what’s better is that after you’ve completed them, all you need to do is submit them to your state.Ĭorporation: Starting a corporation is decidedly more complicated. This document varies in appearance and structure from state to state, but you’ll typically need to include your business name and physical address, the name and address of your registered agent, a description of the nature of your business, and the names of your LLC’s owner/members. Limited Liability Company: The key to forming an LLC is a document called the Articles of Organization, which you’ll file with your state. Let’s take a look at each formation process to highlight these differences. By contrast, forming a corporation takes much more time and effort, and the fees associated with doing so are typically much higher.
The LLC formation process is rather simple and straightforward, and it doesn’t often come with exorbitant fees. Right from the state, you’ll notice distinctions in the formation process, and big ones at that. While this isn’t an all-encompassing list, these are the most important differences between the LLC and the corporation. Evaluating these fundamental differences should give you a good idea about which might be a better fit for your unique company. Now it’s time to dig into the details and really look at what makes LLCs and corporations tick, as well as what sets them apart. The two overarching similarities are important, and reading them might have convinced you that your business needs a formal structure. Major Differences Between LLCs and Corporations This is a great way to protect your company’s reputation and prevent anyone else from trying to profit off of your hard work. Because it’s registered with the state, no other businesses are allowed to use it. Worried that someone might steal your clever business name? If you run an LLC or corporation, that name is yours and yours alone. Sole proprietorships and general partnerships don’t offer this kind of protection, so your personal possessions would be fair game if your business is sued. This means that if your company is sued, creditors can only pursue your business assets, not personal ones. With both of these business types, you won’t have to worry about that because they limit your liability as a business owner. They’re precious to you, and you wouldn’t want a creditor taking them. Take a look at your personal possessions – your house, car, savings, vintage baseball card collection. They aren’t exactly the same, but there’s a decent amount of crossover, so no matter which one you choose, you can enjoy some of these features. Limited liability companies and corporations are fairly similar, but they’re not exactly siblings. Common Characteristics of LLCs and Corporations
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