There’s no denying that starting and managing an
LLC is much easier than other corporations. Since the process is started under state law, the process of forming an LLC depends on the individual state’s law.
When it comes to LLCs and taxes, the IRS doesn’t view them as one unit. Instead, members have the freedom to choose the way they’re taxed. They can be taxed as a
sole proprietorship, a corporation or a partnership. But they do have to pay
self-employment taxes, including Social Security and Medicare. C Corporations are taxed separately from the owners and pay corporate income tax.
An LLC-company can’t offer stock options, and all the profits are distributed to the members. However, a C Corporation has the option to keep the profits within the business and distribute dividends as payment to the shareholders.
Both entities have powerful legal advantages, which help protect assets from creditors and provide protection against legal liability. When it comes to choosing between a
C Corp vs LLC, it comes to which option is better suited for your business goals.