Both options allow founders and their partners to limit their responsibility to company debts and liabilities.
C-Corp
A C-Corporation is a legal entity. Overall, C-Corps have a more formal management structure. Corporations are required to hold an annual shareholder meeting and to observe the governance requirements dictated by the applicable state law. A C-Corp incurs double taxation, and it has the ability to raise capital, which makes it a great option for startups that will be fundraising from investors.
LLC
An LLC is a legal entity that offers a simple way to protect you and your partners from personal liability, to preserve the intellectual property, and to bring partners and investors on board. In general, LLCs have less legal requirements, no obligation to shareholders’ meetings, no taxation duplicates on salaries, and the ownership can be distributed freely. It’s a great option for small businesses that need flexibility.