The Differences between an LLC and Inc.

Forming a business can be both exciting and daunting at the same time. While the types of businesses that you can open are limitless, there must be some consideration regarding the method that you will use when legally forming your business entity. Two of the most common choices are forming a corporation, which is also the oldest type, and forming a limited liability company (LLC), which has existed since 1977. So which formation is the best for you?

The Differences between an LLC and Inc.Cost

One of the most important considerations when you are just starting out is the cost. To file incorporation paperwork in Illinois the cost is $150 with a minimum franchise tax of $25. This minimum $25 franchise tax is assessed on corporations annually.

The cost to file the LLC paperwork in Illinois is $500. There is no franchise tax assessed to LLC formations.

Annual report filing in Illinois costs a corporation $75 and an LLC $250.

Management of the Entity

LLCs are much more flexible than corporations are when it comes to the way that the company is managed. The members of an LLC have the choice whether they want to control the everyday operations of the business or they may opt to appoint nonmembers to the task. Corporations are much more structured. A corporation is made up of officers, shareholders, and directors. The shareholders are responsible for selecting the directors. There must be at least one director who is responsible for the daily activities of the business. The directors then select the officers.

If you have questions regarding the best way to form your business and what each of those formations mean to you, consult with an experienced Illinois small business attorney. Your attorney will make sure that all of your paperwork is filed correctly and that you follow all procedures that are required.

 

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