LLC vs. Business License: What’s the Difference?

The main difference between an LLC and a Business License is that an LLC is a legal structure whereas a business license is a permit that allows you to operate a business in a specific location.

Before we move to more differences, let’s first understand LLC and Business License:

  • LLC: An LLC, which stands for Limited Liability Company, is a legal structure that provides protection for business owners by separating their personal assets from their business liabilities.
  • Business License: A Business License is a permit that allows a business to operate in a specific location, and it ensures that the business complies with local regulations and laws.

Now, let’s get to LLC vs Business License:

Major differences between LLC and Business License

LLC Business License
LLCs are registered with the state. Business Licenses are issued by the local government.
LLCs can have one or more owners. A Business License is usually required for each location where the business operates.
LLCs are required to file articles of organization and other legal documents with the state. Business Licenses may require specific permits or certifications depending on the type of business.
LLCs have a formal structure with management and ownership roles defined in their operating agreement. Business Licenses only define the legal right to operate in a specific location.
LLCs offer protection from personal liability for business debts or lawsuits. A Business License only ensures compliance with local regulations and laws.

So, these are the main differences between the entities.

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