Q:

What is the difference between LLC and Inc.?

A:

Quick Answer

An LLC is a limited liability company, while a company with the word "Inc." means that the business is incorporated. While LLCs share similar features with corporations, they have more operational flexibility.

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Full Answer

An LLC is allowed to pass on a percentage of its profits to personal tax returns, whereas an incorporated business can either file taxes as a business or have the shareholders pay taxes on any dividends they receive. Compared to LLCs, corporations have more record-keeping requirements to adhere to, such as having a ledger that thoroughly describes how vital decisions are reached. The voting records of corporation directors and shareholders also have to be kept. LLCs aren't required to hold meetings every year, nor do they have to draw up detailed financial statements.

Either non-members or actual members of the company can tend to the day-to-day activities of an LLC, which gives members the ability to oversee the company. Incorporated businesses have to be run by shareholders, directors, employees and officers. Corporation owners don't manage the company like officers do, and directors have to improve shareholder profits and properly utilize company resources.

LLCs are prohibited from issuing stock to increase capital, nor are they allowed an initial public offering that permits public investment in the company. Corporations are allowed to go public, and they can also have multiple stock classes for increasing company funds.

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