Corporation vs. LLC

A corporation is a legal entity separate from its owners, offering limited liability and the ability to raise capital through stock. It has a formal structure, with shareholders, directors, and officers, and is often used for larger businesses. An LLC (Limited Liability Company) also provides limited liability but is more flexible, with fewer formal requirements and pass-through taxation, meaning profits are taxed personally to owners. Companies choose based on factors like size, funding needs, management preferences, and tax considerations. Both protect owners’ personal assets but differ in structure, regulation, and tax treatment.