LLC or corporation, state by state.
Both give you limited liability, so that is not the deciding factor people expect it to be. The decision turns on how profit is taxed, what your state asks of each entity every year, and whether anyone will ever buy shares in the business. The last two move with the jurisdiction. Pick your state for the head-to-head as it applies where you are.
Four things that change with your state.
Liability protection is the thing most people think they are choosing between, and it is the one thing the two entities share. These four are where they genuinely part company.
Both protect personal assets
An LLC and a corporation each put a separate legal person between the business and its owners. If limited liability is the whole reason you are forming something, either one does that job, and the decision moves on to tax, paperwork and who is going to own the company in five years.
Pass-through or corporate
Profit in an LLC passes through to the members and lands on their own returns. A corporation is taxed as its own taxpayer unless an election changes that. Either entity can elect S-Corp treatment, which is a federal tax election rather than a change of entity type or a new filing with your state.
Who plans to buy in
Corporations issue stock, support more than one class of it, and are the shape outside investors and an eventual public offering expect to see. Small operating businesses, real estate holding entities and partnerships mostly go the other way, because membership interests suit a handful of known owners.
What your state asks yearly
Ongoing compliance is where the two diverge most by jurisdiction: what each entity has to file, what it has to keep internally, and how often. Some states treat them almost identically and others do not, which is why this comparison is worth reading locally rather than nationally.
Same shield, different machinery. Your state decides how much machinery.
Pick your state.
Each state page runs the comparison for that jurisdiction: when an LLC is the sensible pick there and when a corporation is, how each is taxed locally, what each has to file every year, and what converting from one to the other involves later on.
A clean handoff, in four steps.
The choice is short once the inputs are in front of you. Map what the business is for, look at how profit will actually be taken out, pick the entity, and file it in the right state.
Map your goals
Who owns the business now, who will own it in five years, and whether anybody will need shares rather than membership interests. That question decides more here than anything on a comparison table.
Estimate the tax math
How profit will actually reach the owners, and whether an S-Corp election belongs in the picture, since it is available to both entities and changes the arithmetic for either of them.
Pick your entity
Decide with your own state's tax treatment and annual filing obligations in front of you, rather than on a national rule of thumb that was written about somewhere else.
Start the formation
We prepare and file the formation document for whichever entity you land on, in your state, and set up what that entity needs immediately afterwards.
You can convert later if it changes. It is simpler to decide now.
The rest of Compare & choose.
Every one of these is built the same way: a national explainer above its state pages. They are the filings that sit closest to this one.
LLC vs partnership
LLC vs partnership, state by state
All 51 states → HubLLC vs sole proprietorship
LLC vs sole proprietorship, state by state
All 51 states → HubManager-Managed vs Member-Managed
Manager or member-managed, state by state
All 51 states → HubMulti-member LLC
The multi-member LLC, state by state
All 51 states → HubS-Corp vs LLC
S-Corp vs LLC, state by state
All 51 states → HubSingle-member LLC
The single-member LLC, state by state
All 51 states → HubDelaware LLC vs your state
Delaware, or your own state
All 51 states → HubFlorida LLC vs your state
Florida, or your own state
All 51 states →The full index lives on Compare & choose.
The questions people ask before they choose.
Which one is better for a small business?
There is a strong pattern rather than a rule. Small operating businesses, real estate holding entities and partnerships mostly form LLCs, because membership interests fit a small group of known owners and the internal machinery is lighter. Corporations are the usual choice where outside investment, multiple classes of equity or an eventual public offering are genuinely on the table rather than a distant possibility.
Do both really protect my personal assets?
Yes. Both create a separate legal person that holds the business liability, which is why liability alone rarely settles the choice. What neither does is protect you from your own conduct, or survive being run as though the company and the owner are the same thing. Keeping the entity properly separate, with its own account and its own records, is what makes the protection worth having.
Can an LLC be taxed like a corporation?
It can. The S-Corp election is federal, made on a form with the IRS, and it is open to both LLCs and corporations. That is why tax treatment and entity type are worth thinking about as two decisions rather than one: you are choosing the legal form first, then choosing how that form is taxed, and the second choice can be revisited as the business changes.
Can I convert from one to the other later?
Yes, and plenty of businesses do once the shape of the ownership changes. It is a filing rather than a catastrophe, though it takes work and it carries consequences, particularly on the tax side. The practical advice is not to agonize: pick the entity that fits the business you have now, and treat conversion as the route available if the business turns into a different one.
What does ongoing compliance actually mean?
The recurring obligations an entity carries once it exists: the filings your state expects on a schedule, the records the entity is supposed to keep internally, and the returns that follow from how it is taxed. The list differs by entity type and by jurisdiction, sometimes considerably. Each state page sets out what an LLC and a corporation each carry in that state, side by side.
Does the state I form in change the answer?
Enough that the comparison is run separately for every jurisdiction. Liability protection reads the same across the country, but annual obligations, tax treatment at state level and the paperwork attached to each entity type do not. Two businesses with identical plans can reasonably reach different conclusions in different states, which is why a national answer to this question is not much of an answer.
Keep going, in order.
Compare & choose
Every hub in compare & choose, in one place.
Open the index → IndexAll 51 state guides
Every filing a business does, organised by jurisdiction.
Open the index → ServiceCompliance calendar
Every deadline that touches your entity, watched.
Track deadlines → ServiceTalk to a specialist
A person who files these every day, not a call centre.
Get in touch →