Delaware Corporation vs L.L.C

Updated time: Dec 28, 2015 , 15:24 (UTC+08:00)

  L.L.C Company Corporation Company
Governance Structure

All members are bound in an Operating Agreement.

The Operating Agreement determines all issues in the company.

The members may manage the company themselves or they may hire an external manager.

There are 3 tiers of power:

Shareholders: owner of the company

Directors: manage the major business actions

Officers: carry out day-to-day business activities

Federal Taxation

IRS considers single-member L.L.C a disregarded Entity and a multi-member LLC a Partnership.

The Entity / Partnership must fill in Employer Identification Number (EIN) - also called Federal Tax ID Number.

IRS taxes 3 different ways:


- C-Corporation: pays taxes on profits each year and may choose to distribute dividends to shareholders. If the shareholders are a small, tight-knit group, this is often referred to as double taxation.

- S-Corporation: the tax liability on the profits and losses of the company are passed through to the shareholders. They must pay the taxes.

- Tax Exempt: the company must file IRS Form 1023 and qualify for tax exempt status by engaging in a qualifying charitable, religious or public service purpose.

Privacy No Annual Report required

Annual Report must state:

- Corporation’s physical address

- All Directors name & address

- One Officer’s name & address

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