A corporation, like an LLC, has liability protection but does not protect its owners against double taxation. C corporation owners are subject to both corporate income tax and personal income tax. An S corp is not a business entity but a federal tax choice. A C corp or LLC can apply for an S-Corp. This federal tax election protects the owners’ personal assets and avoids double taxes. Although it is easy and cost-effective to run a business as a sole proprietor, there is no protection for liability like an LLC. Compare sole proprietorships.
There is a major difference between operating as a sole proprietorship and an LLC. This is because personal assets are kept separate from business. An LLC keeps personal assets separate, while sole proprietors have the same expenses. Your personal assets and property can be taken after a business is sued.
General Partnership vs. LLC
You will be dealing with formalities here. The process of forming an LLC involves many details, including preparing and filing paperwork with the Secretary. It is not necessary to enter into a formal agreement when forming a partnership.
Limited Liability Partnership
An LLP is similar to an LLC in that it offers limited liability. However, an LLP gives it more. An llcradar protects all members from personal liability for business debts and lawsuits.An LLP, on the other hand, provides only liability protection for each partner’s direct investment.