In the United States, companies are taxed in two different ways, either only at the partner level or at both the partner and company level (double-taxing). In this respect, LLC type companies have only one level of taxation. Many small businesses choose LLC type companies to avoid double taxation.
Another advantage of forming an LLC type company is that the partners of the company have limited liability. In cases where the company is in debt or is sued, the assets of the partners of the company are not affected by such negative situations. Similarly, there is no personal responsibility for the results of the decisions taken regarding the company or the activities of the company. In addition, LLC type companies are exempted from strict record keeping obligations.
Despite the above-mentioned advantages, many businesses prefer the C-Corp company structure. The prominent reason in this regard is that it is possible to issue an unlimited number of shares in this type of company and allows growth. Another advantage of C-Corp type companies is the possibility of protection from IRS audit. Such companies are subject to double taxation. However, with good tax planning, most of the costs of dual taxation can be eliminated.