When starting a new business, it can be confusing to understand the difference between entities. As a result, our focus will be LLCs and corporations.
That is to say, when I speak about corporations I’m referencing the entity type. As well as, C corp tax status the (default tax status). Furthermore, I’m focusing on c corporation, not s corporation. LLCs and corporations are both state formed entity types that businesses can choose to operate as. They become their own separate entity apart from the owner.
The formation for LLCs and corporations are the same with a slight difference. An LLC if formed by filling an articles of organization with the secretary of state you want the business to be formed. While a corporation files an articles of incorporation. For instance, articles of corporation is more lengthy and detailed compared to the articles of organization. However, this will vary from state to state. Though generally there’s more that goes into an articles of incorporation. There’s an even bigger difference when it comes to other corporate formalities related to formation of the business. Being that, corporations are usually required to do certain things.
Find out what exactly corporation are required to do in this episode of All Up In Yo’ Business,. Check out the full video to learn more!
Want to learn more about LLC’s? Check out: Should I form an LLC?