There are many similarities between corporations and limited liability companies (LLCs). For example, both types of business limit the personal liability of the owners. But there are differences as well – especially when it comes to terminology.
- What an Owner is Called. In a corporation, an owner is called a shareholder. In an LLC, an owner is called a member.
- What an Owner Owns. In a corporation, an owner owns shares of stock. In an LLC, an owner owns a membership interest.
- The Document that Creates the Entity. For a corporation, it’s called the Articles of Incorporation. For an LLC, it’s called the Articles of Organization.
- The Document that Covers Internal Procedures. For a corporation, it’s called the bylaws. For an LLC, it’s called the operating agreement.
The attorneys at the Ann Arbor firm of Hamilton, Graziano & London can explain the other differences between corporations and LLCs, and help you decide which is best for you.