LLC or INC
In fact, what is an LLC? The letters may seem confusing, but LLC and inc. are abbreviations for different kinds of business entities.
LLCs and INCs
Corporations have been around for a long time, and they have a fairly standard and rigid management structure.
Corporations must have a board of directors that sets policies and oversees the business.
A corporation’s day-to-day affairs are managed by its officers. In a small corporation, one person may wear several hats, being a shareholder as well as an officer and director. In larger corporations, shareholders are less likely to be involved in running the business.
The rights and responsibilities of the directors, officers and shareholders are spelled out in the corporation’s bylaws.
LLC or INC: which should I choose?
Both types of entities have the significant legal advantage of helping to protect assets from creditors and providing an extra layer of protection against legal liability.
Creating an LLC is a much simpler process than creating a corporation and generally takes less paperwork. LLCs are under the jurisdiction of state law, so the process of forming an LLC depends on the state where it is being filed.
Most states require filing articles of organization with the secretary of state, and some states allow for them to be filled out online. A few states require an additional step of filing a public notice, often in local newspapers. Once these steps are completed, the LLC is officially formed.