Is an LLC a Corporation?
Article provided by The LLC Expert, LLC: http://www.TheLLCExpert.com
Is an LLC a Corporation? The answer is technically NO but the limited liability company offers all the advantages of a corporation without the disadvantages. The corporation is an age old legal entity that has been around for ages primarily to afford limited liability to businesses and offer them a way to eventually become public. A corporation has shareholders as owners and issues shares of stock as ownership interests. On the other hand, the LLC, which is short for limited liability company, is a relatively newer type of legal entity that was not available until the 1970s. However, do not let the young age of the LLC fool you. You see, entrepreneurship is the main driver of the economy in the US. Yet before the LLC, the only way entrepreneurs could obtain personal liability protection was to incorporate their business with a corporation. The corporation entity subjected small business owners to onerous requirements and formalities often not needed for the typical small business. The state legislatures recognized this and in attempts to further support the small business growth in this nation, looked to enact laws to provide for a more suitable limited liability entity for the small business. Wyoming was the first state to enact laws allowing for the creation of the LLC and now, the number of limited liability formations has surpassed corporations. This is because the LLC provides more of what is typically needed for a small business and does not require anything else. At the same time, it has the ability to change and grow and accommodate complexity as a business grows. Is an LLC a corporation? No, but for most small businesses, it is a better choice than a corporation. For more detail about the differences between a corporation and an LLC, visit our Report Is an LLC a Corporation at http://www.TheLLCExpert.com.