Like a Corporation, an LLC offers limited liability to its owners. Unlike a Corporation, however, an LLC is taxed as a Partnership or Sole Proprietorship (unless the LLC elects to be taxed as a Corporation). This allows an LLC to pass all its income and losses through to the owners.

Furthermore, the LLC has an advantage over a C-Corporation which makes an S-Corporation tax election because the S-Corporation can only have 100 stockholders and the stockholders cannot be Corporations or non-U.S. citizens.

For tax purposes, all Corporations are General C-Corporations when they are formed. This tax status permits them to pay a 15% federal rate on the first $50,000 of taxable income each year.

An LLC can elect the C-Corporation tax status. They can deduct health insurance, medical and dental expenses and disability insurance premiums for employees (who may also be stockholders).

The stockholders of a Delaware Corporation and the owners of units in a Delaware LLC are not personally liable to the creditors of a Delaware Corporation or LLC unless they personally guarantee the obligations.