LLC versus corporation

Choice of entity is a threshold issue when starting a business. Both LLCs and corporations offer similar protections from personal liability, so the choice often comes down to tax and operational considerations. LLCs are simpler to administer, as they operate through a manager or directly through the members, while corporations have multiple layers with shareholders, directors and officers. Both LLCs and corporations can be pass-through entities for tax purposes. LLCs are generally preferable for passive entities, like real estate holding companies, while corporations are often preferable for businesses that pay owner salaries and benefits. Sound legal and tax advice based on the facts and circumstances of your particular business is required to make the decision between an LLC and a corporation.