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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