Most “movers and shakers” need to pick between establishing a corporation (aka Inc.) or a limited liability company (aka LLC)
An LLC, or limited liability company, is a legal business entity you form to protect your personal assets from liability. It will also establish how your business income is treated come tax time. It’s not the only business entity that does this, though. It’s one of a handful.
The other most common option is a corporation (aka a corp or Inc.). Corporations are another business entity that also provides liability protection. But, they are set up a little differently from an LLC. They are an entirely separate entity from their owners, who hold ownership through shares (or stock) of the company.
These two business entity options have some similarities and, of course, differences. Choosing between the two will depend on your business type and needs and your own liability and tax planning goals.
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.” The governing rules of an LLC are spelled out in an “operating agreement.”