Corporation vs. LLC Ownership
As an owner of a corporation you will be considered a shareholder and you will own a number of share issued by the corporation according to the percentage of your ownership in the corporation. If you are a shareholder in a corporation that has issued 15,000 shares and you own one third of the corporation, this means you will own 5,000 shares. A much appreciated advantage of the corporation as a business entity is that shares are relatively easy to transfer. Additionally, corporations have perpetual life, so if another shareholder choses to leave, sell his or her shares or dies, the corporation’s existence is not threatened.
As a LLC owner you will be called a member and you will own a percentage of the business, sometimes named “membership interest.” The difference between corporations and LLCs regarding ownership is that in this case you will generally meet restrictions if you want to transfer LLC membership interests such as the necessity of requiring the other members’ approval. Depending on the state you are in, your LLC might need to be dissolved if a member decides to leave, dies or files bankruptcy.
For a small business with carefully chosen business partners, an LLC can be the right business entity to go with. If your business plans include seeking outside investors or providing shares to your employees, than the advantages of a corporation are more suited to your needs.