Corporations and LLCs

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, Judge, Schroer & Steingold can explain the other differences between corporations and LLCs, and help you decide which is best for you.