What Is an LLC? And How Is It Different Than a Corporation?

As the owner of several businesses in the Los Angeles  entertainment industry, I know from experience that you’ll have a  quadrillion questions.

Most “movers and shakers” need to pick between establishing a corporation (aka Inc.) or a limited liability company (aka LLC).

This can be a tough decision, largely because it’s difficult to  understand the differences (let alone which might benefit you more)!

An LLC, or limited liability company, is a legal business entity you form to protect your personal assets from liability.

What is an LLC?

The other most common option is a corporation (aka a corp or Inc.).  Corporations are another business entity that also provides liability  protection.

What is a corporation?

An LLC is typically either owned by one person or a small group of  co-founders. But technically, an LLC doesn’t have “owners”; it has  “members.”

Ownership

Meanwhile, an Inc. effectively belongs to the people who hold shares in  it, and the company management is accountable to those shareholders.

Ownership

One reason why making your business an LLC is worthwhile is because it creates a barrier between the business activity and the member’s personal assets from a legal standpoint.

Liability Protection

That said, an Inc. pretty much offers the same liability protection that  an LLC does, especially for an Inc. owned by one person or spouses.

Liability Protection

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