Is an LLC a Corporation or Partnership?

Hello, this is your LLC Guru here, welcome to our site.  We help regular people get their own LLCs quickly, inexpensively, and with confidence!  If you need an LLC or are even thinking about getting one, you are at the right place.  Here at YourLLCGuru.com, we’ll help you get your own LLC in about 10 minutes!

Before we start I would like to mention that this is in no way legal or tax advice. 

So, to answer the question “is an LLC a corporation or partnership?….., it is neither.  A Limited Liability Company, or LLC for short, shares some commonalities with corporations and partnerships but it is a different business entity that stands on its own and has its own requirements.  Each entity has some similarities and differences.

It may help to differentiate between these entities by hearing the definition for each so let’s begin with what is a Partnership? In business, a partnership is a relationship between two or more people where each partner contributes to the business and each partner has a specific ownership percentage; the partnership operates and exists under a partnership agreement. This offers no liability protection.

Corporations do offer liability protection and have more requirements and are more complex.   A corporation has a legal existence distinct from its owners which means the corporation can hold title of property, have its own bank account, etc.  Corporations are usually for larger businesses and generally have three distinct groups of people involved which consist of people who direct the business, those who run the day-to-day business and those who are the investors.  

Now, this leaves us with the LLC.  Limited Liability Companies are a cross between a partnership and a corporation.  Similar to the business entities already defined, LLCs also must file papers with the State generally called Articles of Organization.  Operating an LLC is less complicated than running a corporation as generally, they do not require routine meetings with the officers, directors and shareholders.  In general an LLC offers liability protection similar to the costly and complex corporation but with an operating structure and simplicity similar to a sole proprietorship or partnership.  This makes them ideal for most small businesses. 

Determining the correct business entity is an important decision and as you can see, you have options.  Here at YourLLCGuru, we encourage you to look into this further and be sure you know which entity is right for you.  Check out our other posts here on the site or our videos on YouTube for additional information.  If you decide an LLC is a right choice for you, we can help guide you and you can have an LLC formed in as little as 10 minutes.  

In my next post, we will unpack more details around LLCs.  Please check out some of my other posts and videos on YouTube so you can learn more helpful information about LLCs and how to use them to protect yourself in business.