Main Difference
Inc. and LLC are business corporations that are highly used worldwide to improve business. Inc. is a corporation, whereas LLC is a liability company. Both tools’ main work is to vary in tax treatment. Moreover, Inc. and LLC differ in ownership, management, and taxation. The abbreviation of LLC is limited liability company. Let us discuss the main differences between Inc. and LLC in detail.
What is Inc?
The full name of Inc. is Incorporation. There are also many alternative names of Inc, such as certificate of Incorporation or letters patent. The primary purpose of Inc. is listing. Moreover, the registration fee is between $25 and $1000, depending on the state. Furthermore, Inc. requires one member for the setup. Inc. holds an annual meeting and records minutes. In addition, it requires a lot of paperwork and documents.
Advantages
- is suitable for large entities
- It stands for incorporated
- The death of shareholders does not affect the existence of the corporation
- Meeting arrange periodically
Disadvantages
- Demands double taxation
- Require a lot of paperwork
- Separate entity
- Limited liability
What is LLC?
LLC is the abbreviation of limited liability corporation. The agreement is a contract between members of a limited liability corporation, management, and company distribution. Moreover, the owner of an LLC is called a member of the shareholder.
These members are responsible for managing and maintaining the affairs of the LLC. Furthermore, there is no limit on the number of owners. In addition, it demands one or more persons. Also, LLC has a separate legal entity for partners. They keep records of the annual meeting. Lastly, it requires one or more persons. Also, LLC has a separate legal entity for partners. They keep records of the annual meeting.
Advantages
- Suitable for small business
- Single taxation
- Requires not so much paperwork
- Separate entity
Disadvantages
- Limited liability
- Cannot engage in corporate income
- Differ with each state
- Indefinite term
Key Difference between Inc. and LLC
- requires more paperwork as compared to LLC.
- Is suitable for large businesses, while LLC is suitable for small businesses.
- LLC demands single taxation, whereas Inc. demands double taxation.
- Owners of Inc. are shareholders, while owners of LLC are members.
- LLC has a choice of tax, while Inc. has no choice.
Comparison table between Inc. and LLC
| Features | Inc. | LLC |
| Ownership | Shareholders | Members |
| Tax | Double taxation | Single taxation |
| Managing level | Directors and shareholders and others | Members and managing members |
| Suitable for | Large business | Small business |
| Abbreviation for | Incorporation | Limited liability company |
Conclusion
In a nutshell, we can say that both Inc. and LLC are different. They have their importance and stand for different meanings. I hope your confusion will be eradicated.
