Hey everyone, one simple question that I get often is what’s the difference between a Limited Liability Company (LLC) and a Corporation (INC)? In short, these are what we call “legal entities” that give the corporation or LLC its own legal status separate and apart from its owners.
What’s the Difference Between a Limited Liability Company (LLC) and a Corporation (INC)?
An LLC is best if you want the most informal company possible, while the INC is a better tool if you want to grow the business into a bigger company with shares that can be bought, sold or transferred to investors.
If you start a business yourself without a “LLC” or an “Inc”, the default is what we call a “sole proprietorship” or a d/b/a (short for “doing business as”). If you and a business partner(s) join forces to form a business, it will be a general partnership.
Generally, the reason why people use a LLC or an INC is so that the company can have its own bank account and legal standing (the ability to sue and/or be sued) separate and apart from the owner.
This is a very general explanation, but give us a call today at (858) 926-5797 and we’d be happy to explain more! If you’re considering one of the above options, you can also see our “Starting a Business” page for more on how our business lawyers at Gallagher Krich, APC, can provide assistance to fit your needs.