Which is better, an LLC or C Corp

UPDATED: Sep 30, 2022

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Which is better, an LLC or C Corp

Opening a small used car lot and want
to incorporate, which is better

Asked on May 30, 2017 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

An LLC is probably better for your purposes: with a C-corp, you get double taxation: profits are taxed at the corporate level, then anything you take out (e.g. dividends or other distributions of profit) are taxed again on your personal income taxes. But with an LLC, you can elect "partnership" or "pass through" tax treatment, in which case there is no taxation as the business/entity level: rather, profits or losses are attributed to the owner(s) (called "member[s]") and are only taxed once on their personal returns.

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