About Model LLC

Knowing the differences between LLC and C Corp, two types of companies in the US, is important when starting a new international venture. Each type of company has its particularities and benefits according to the company's objective.

LLC and C Corp (or C Corporation) are the types that present the best benefits for Brazilian entrepreneurs who want to open a business in the US, these models can be compared with Ltda and SA, respectively. However, they have major differences between them but issues of management, administration and taxation.

An LLC type company is a Limited Liability Company, it is similar to the Brazilian Ltda type company.

If you do not wish to distribute dividends up to the limit of 250,000 accumulated dollars, through an LLC it is possible to avoid double taxation, as this type of company does not pay income tax, although it is mandatory to submit a tax return. In this way, all profit is distributed to the partner(s) who will pay income tax as an individual. Furthermore, it is possible to enjoy tax benefits in some states such as Florida, where individuals do not need to pay state income tax, reducing taxation.

Finally, the LLC helps protect personal assets in case of legal or financial problems that the company may get involved. It is not a guarantee of shielding, but liability is limited by law.

Partial separation of liability means that LLCs are separate entities from their members. Thus, the personal assets of the partners cannot be seized in case of legal consequences. 

Now, for those looking for contributions and investments for their company, or who do not intend to distribute profits, the LLC type of company is not the most suitable. Investors prefer the C Corp type as it facilitates trading and participation in the stock market. For an LLC to receive capital, it must resort to bank loans or other means.

If you are looking to open a company in the US with flexibility and ease of management, annual profit distribution and limited liability in case of problems, the LLC is an excellent format.

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Similarities between LLC and C Corp companies:

- Both can be transferred to other people or companies, following the rules of each state.

- Both have an indefinite duration, not needing to be terminated in cases of absence or death of the partners.

- LLC's can become C Corp's and vice versa, according to the rules of each state. Both can also be transferred to another state.

- These two models have partial liability protection for individual members in case of legal or financial problems.

Do you understand the difference?

Now that you know the differences between the models, count on America Expert to open the company in the United States in a simple, fast and safe way.

Just follow this form filling out all the information to count on our support in opening your company.

If you have any questions and need to speak with one of our consultants to better understand which model is most suitable for your business, contact us.