A corporation is a legal entity separate from its owners. Two of the most common types of corporations are S Corp and C Corp. There are several advantages of forming a corporation. Incorporating offers liability protection, which means that owners of a corporation are generally not personally responsible for business obligations like debts or lawsuits. Incorporation also allows for the addition of shareholders and the ability to raise money from outside investors.
A limited liability company (LLC) is also a business entity, similar to a corporation. An LLC owner is generally not personally liable for the business's debts and lawsuits. Another advantage of an LLC is it allows the business to operate more easily than a corporation with simpler state and tax requirements. Having an LLC can also help you open bank accounts, enter into contracts, hire employees, and get necessary business licenses and permits.