Both corporations and LLCs will offer limited liability for their owners, so often the decision between the two types of organizations is driven by tax considerations. LLCs usually act as “pass through” entities for tax purposes – meaning that the profits and losses of the entity are passed directly to the LLC members. In contrast a corporation is a “blocker” in that it is a separate entity for tax purposes and its profits and losses are not directly passed through to its shareholders.
Either type of entity can be used to conduct U.S. operations and can provide the protections of limited liability for its owners. However, many find corporations to offer the following advantages: