/biz/ - Business & Finance

>>596138
the main reason people choose LLC's is cause they're less complex

>>596143
less complex how?

And if that's the case, why do people even bother making corporations if LLCs are just easier versions of corporations to form?

LLCs are essentially business licenses for one-man band or small group operations.

They don't have access to typical business financing (or have a harder time getting that money), but they don't have as complex accounting requirements.

>>596165
Totally wrong.

When you form an llc it isnt a recognized tax entity by the irs so you have to choose whats called an "entity classification election"

You could be sole proprietor. S corp. Partnership etc

>What are the pros and cons of an LLC vs a Corporation?

An LLC is a corporation. It does not have stock and you have more flexibility in determining stake in the corporation and profit sharing between small numbers of partners, and you have options on whether to declare income from it as self-employed income as a sole proprietorship or partnership or you can pay corporate tax and take it like dividends.

With an S-Corp you could do the above but profits are divided according to stock, while a C-Corp doesn't allow pass-through taxation.

>My business major friends can't even explain the difference to me.

That's because business majors are categorically dumbfucks who don't know basic shit that pertains to their own discipline, the degree is essentially basket weaving 101 for frat bros.

>>596182

>That's because business majors are categorically dumbfucks who don't know basic shit that pertains to their own discipline, the degree is essentially basket weaving 101 for frat bros.

This

It's really more of a degree for people entering HR as a career just like people who major in psychology with no intention of pursuing a phd

one of the major differences is liability
unlimited liability and limited liability
if im not mistaken corporations have limited liability and LLCs have unlimited

How is /biz/ this retarded?

>>596701
The LL in LLC literally stands for "LIMITED LIABILITY".

Look, OP, the primary perk of an LLC is that your liability is limited to the assets of the company. If your company fails, its assets sold, and it still owes debt, they can't come for your personal possessions. This is what makes the LLC a power instrument for entrepreneurship.

>>596701

>corporations have limited liability and LLCs have unlimited
>LIMITED LIABILITY CORPORATION

My god man. What makes you decide to post on a business board?

>>596159
>less complex how?
By default a single member LLC is treated like a sole proprietorship. It's part of your 1040 income tax return. If there are two or more members an LLC is automatically treated as a partnership.

And no matter how many owners there are from 1 to 100 an LLC can elect to be treated like an S-Corp with IRS if they meet a few other basic requirements (google it).

Also the paperwork to keep an LLC properly operated is less onerous than a Corporation but that doesn't have anything to do with the way it's taxed.

>why do people even bother making corporations if LLCs are just easier versions of corporations to form?
LLCs can elect to file as S-Corporations which is far more advantageous tax-wise versus a C-Corp for most small business owners. So for some people a corporation and not an LLC is just for the vanity of having "corp" or "inc" at the end of their name. Or they want to be taxed as a C-Corp since C-Corps can have more than 100 shareholders, have non-US owners, etc. Or they're just uninformed (as a tax guy this is by far the most common reason.)

>>596713
>>LIMITED LIABILITY CORPORATION
You're wrong, too. The "C" does not stand for Corporation.


>>596195
>It's really more of a degree for people entering HR as a career just like people who major in psychology with no intention of pursuing a phd.
Fun fact: People with Economics BS degrees make more than those who get a MS Econ degree, who make more than those who get a PhD Econ degree. I'll let you guys think about why that's the case.

>BS Economics
>Self employed
>Making more than my friends with 6 figures of law school debt

>>596701

>I took Econ 101 in college.

>>596182
>An LLC is a corporation.
Wrong

>>596165
>LLCs are essentially business licenses for one-man band or small group operations.
They're often used that way, sure. But there are plenty of billion dollar LLCs nowadays.

>>596195
>>596182
Jokes on you, faggots. I sit around smoking weed all semester and earn a 3.85+ every semester at a top 30 undergrad b school majoring in Finance.

Guess who's a very competitive applicant for Ivy League MBA programs in 2 or 3 years...?

What has your non basket weaving degree gotten you?

>>596763
>brags about wasting time
I'm sure you'll achieve something in life.

>>596763
So that's how your brain works - "I'm in a position where one day I might make a lot of money"? You think anyone would really be impressed with that line? Results matter dipshit, not the possibility of results.

>>596785
>>596788
Stay mad, STEMfags. I'm currently an intern at a Management Consulting firm in NYC.

>brags about wasting time
I'm not bragging. It just seems that way cause my college career path is much more efficient and effective than yours.