LLC's VS Corporations
Now that you have your dozen rabbits like our quote suggests, it is time to find them a home under one roof before they start reproducing like Gremlins and take over. That is exactly what you’re going to do to focus your stream of ideas and start executing your projects. Here´s a summarized breakdown of what each, an LLC and a C-Corp, are good at handling.
Limited Liability Company
- Limited Liability Protection and Separation of Personal Assets.
- Default Pass Through Income Taxes
- Flexible and less Formal Management Structure
- Simplified Tax Reporting
- Flexible at choosing how to split income among Members.
- Ideal for SINGLE Member ownership
- NOT good for raising Venture Capital
C-Corporation
- Limited Liability Protection and Separation of Personal Assets.
- Responsible for Income Taxes at a corporate Level and Shareholders responsible for individual Income Tax in case of Dividends.
- More formal Management Structure requiring a Board of Directors and more robust Corporate Governance.
- Preferred by Venture Capital, Private Funds and in general by outside Investors.
- Corporation can offer stock options and bonuses to employees to attract and retain talent.