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Affordable business formation, compliance, and operations for truckers.

LLC VS C Corp Comparison

Aspect LLC (Limited Liability Company) C Corporation (C Corp)
Legal Formation Requires filing Articles of Organization with the state Requires filing Articles of Incorporation with the state
Liability Protection Yes, protects owners from personal liability for business debts Yes, protects shareholders, directors, and officers from liability
Ownership Owned by members; ownership defined in Operating Agreement Owned by shareholders; ownership through stock
Management Structure Flexible; members manage directly or appoint managers Rigid; must have board of directors, officers, and shareholders
Taxation Pass-through taxation (income taxed at owner level only) Double taxation (corporate profits and shareholder dividends taxed)
Stock Issuance Cannot issue stock Can issue multiple classes of stock to attract investors
Investor Appeal Less attractive due to no stock and pass-through taxation More attractive due to stock and established governance
Formalities Fewer required formalities and paperwork Must hold annual meetings, keep records, and follow corporate rules
Continuity May dissolve if a member leaves unless otherwise stated Perpetual existence regardless of changes in ownership
Operating Flexibility High; determined by members and outlined in Operating Agreement Limited; follows corporate bylaws and state laws
Global Recognition Not typically recognized internationally Recognized and can operate internationally
Profit Distribution Determined by agreement, not necessarily based on ownership percentage Based on share ownership
Best For Small to mid-size businesses seeking flexibility and tax simplicity Businesses planning to raise capital or go public

Now that you know all you need, what do you choose? An LLC is a business structure that offers protection to its owners and avoids double taxation. C corps also offer personal liability protection to their owners, but their profits are taxed at both the corporate and personal levels. C corps also have strict administration requirements like annual meetings, extensive record keeping, and electing a board of directors.