The decision to start a business is a monumental one, and any savvy entrepreneur knows that creating it with the right legal structure is essential for success. Incorporation can be a complex process, and business owners may want to consider factors like taxation, the liabilities of shareholders, and the cost of creating the business entity. Two popular legal structures are the limited liability company (LLC) and C Corporation (Inc.) – let’s look at the differences between the two to help you choose the right one for your business.

An LLC is a hybrid business structure that combines some of the benefits of both partnerships and corporations. LLCs are much less formal than corporations and do not require added paperwork like articles of incorporation. Additionally, they don’t have shareholders and can pass through income taxes so that income remains taxable only at the individual level. This structure also limits the personal liability of owners, meaning their personal assets can’t be used to pay off debts of the business.

By contrast, C Corporations are much more formal. They require the filing of articles of incorporation with the appropriate state agency, and have similar tax benefits to LLCs, but require corporate income taxes to be paid at the company level. Additionally, opposed to LLCs, C Corporations can have an unlimited amount of shareholders, with each one liable only for their own investments in the company.

The choice between LLCs and C Corporations isn’t one you’ll make lightly—it depends heavily on the goals and needs of your business. Because of the complexities involved, it’s important to consult with a business lawyer, preferably one licensed in the state of Illinois, to get started on the legal aspects of starting your business. Doing so may save you from future issues and ensure you are compliant with Illinois state regulation.

UpCounsel’s community of experienced lawyers can provide you with high quality legal services on demand to get you started today. From sole proprietors to the Fortune 1000, UpCounsel has you covered. You can also browse through the ratings and reviews of attorneys to make sure you pick the right lawyer for your business. This highly experienced legal team can put together the appropriate structure for your business, saving you time and money while also making sure you don’t make any mistakes.

The experts at UpCounsel can connect you with a knowledgeable attorney who understands business law and the particular regulatory issues of your jurisdiction. Don’t let the complexities of registering your business slow you down; get the legal support you need to make sure you’re doing it correctly.



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