The basic definition of an LLC is a legal entity where personal assets like the partners' houses, properties and stocks are protected if the company suffers a loss. This is what's meant by LLC, or limited liability company. It protects the owners of the company against the company's liabilities and debts.
For example, if the company is sued by an external party and is directed by the court to cover damages, the company's partners are immune to any liabilities. So, if the company cannot pay the damages, the partners are protected and can't be pursued to pay for any liabilities and debts with their assets.
An LLC is a hybrid partnership but has some features of a corporation regarding liabilities. We could say that an LLC
is much closer to a corporation than a partnership, but a limited liability company is much easier to establish.
An S corporation or S corp
has some similarities to an LLC. For example, the owners of an S corp get pass-through income like in an LLC and the owners' personal property is protected against business liabilities.
An S corp has more credibility because it comes with more oversight, thanks to its board of directors. It's mandatory to have a board of directors in an S corp that looks over the management and balance sheets of the company. You can have up to 100 shareholders in the company, which get paid dividends or cash payments from profits.
In an S corp, also known as the S subchapter, it's possible to have a hybrid business. For example, a company can work as an LLC and an S corp, with you having the freedom to choose things like whether the company is taxed as an S corp or LLC, depending on the amount of your tax bill. In an LLC vs S corp comparison, the latter has a much longer list of regulations as per the IRS.
A C corp, also known as a C corporation is a type of business structure wherein the business owners are taxed separately from the business entity. You could say it's the upgrade from an LLC or S corp. However, a C corp is also liable to pay corporate income taxes. So in a C corp, the owners also pay personal taxes, while the corporation pays corporate taxes.
Like an S corp or LLC, a C corp protects its owners from the company's assets and liabilities.