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IS AN LLC A TYPE OF CORPORATION?

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An interesting question I often hear is the following: “Is an LLC a type of corporation?” The answer is “No,” but LLCs bear some resemblance to corporations. First of all, a corporation is a state-chartered entity that is authorized by a state’s corporation law. LLCs are authorized to be formed by a different set of statutes, never by the same state law that authorizes the formation of a corporation. LLCs have their own separate statutes in all 50 states. Thus, in the eyes of the law, an LLC is a separate type of business organization and should not be confused with a corporation, despite many similarities between the two.

Ultimate LLC Compliance Guide

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