Better understand some differences between LLC and Corporation

Better understand some differences between LLC and Corporation

First of all, we want to thank you for continuing to write us and ask your questions about this topic; nothing satisfies us more than being able to provide you with information in a clear and timely manner; that is why we hope to continue counting on your support in your property search process; either as an investment, or as the house you dream to live in.

Because you asked for, is why we have made this summary, to help you better understand some of the differences between LLC and Corporation; and we know it will be of great help.

C CORP – Corporation

LLC – Limited Liability Company

Responsibilities of the company created Corporate obligations are limited to partners, not individuals. Corporate obligations are limited to the members of the company.
Obligation to pay Taxes It is subject to double taxation. At the corporate level, and then upon receipt of dividends by its shareholders. The company’s shareholders do not need to file a tax return (until they receive a distribution of profits). It is subject to taxation. Except if the company chooses to be managed as a corporation. Profits and losses are passed through to its members. Every year the members must declare taxes in the United States.
Limitations on Ownership Unlimited types of shares. Unlimited number of shareholders. Does not generate shares. Unlimited number of members.
Documents to create the company Articles of Incorporation, Bylaws, Organizational Board Resolutions, Stock Certificates y Stock Ledger. Articles of Organization y Operating Agreement.
Organizational structure for management Rigid structure, with Board of Directors, overall responsibility for management, while managers are responsible for the execution of day-to-day tasks. More flexible structure, with Operating Agreement, decides how the business will be managed, and a manager can be appointed to be in charge.
Capital contribution The shares are purchased by the shareholders and do not need to be part of the company’s operations. Generally, the founder members contribute money or services at the time of starting the company.
Investment raising It can raise funds by issuing convertible debt and selling shares. You can raise funds by issuing “membership interests”.
Creation of credit risk A credit score can be built in the name of the company itself. It uses the credit score of the company’s owners.


Keep in mind that the most important thing will continue to be the support of a company specialized in business creation in the United States.

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