Menu X Menu
How may we help you?


Is an LLC a corporation? What's the Difference?
Companies Served Since 1981

Is an LLC a corporation? What's the Difference?

By Rick Bell Tuesday, June 21, 2016

Is an LLC a corporation?

What's The Difference Between an LLC & a Corporation?


Why is Google a corporation and YouTube an LLC? Both, of course, chose Delaware as their corporate home, even though they are headquartered elsewhere.


So why did Google choose to form as a corporation and YouTube as an LLC?


The corporation vs LLC distinction is clearly defined by this one example of which the new generation of entrepreneurs should take full take advantage.


Please note, this is not a question of “which is right?” or "which is better?" It is, however, a matter of strategy.


YouTube actually started as a corporation, filing its Certificate of Incorporation with the Delaware Division of Corporations on October 3, 2005. On November 8, 2006, just 13 months and five days later, it converted its corporation into an LLC, which is one of the key advantages of Delaware companies: they can change from one form of entity to another, whenever they want.


Google, as you know, was incorporated in 1998 and is listed on the NASDAQ, after its 2004 IPO. Even though much of Google is owned by institutions, there are millions of individual shareholders in the company.


YouTube LLC, on the other hand, is owned by very few members. Nobody but the insiders know how few, and nobody but the insiders know who the owners are.


In addition, only the owners know the details of the company's finances, because no public disclosure is required; that’s the benefit of a Delaware LLC—your members, their ownership percentages and your financial valuation are private matters, of which only the company insiders are aware. 


There is no public registration, no public disclosure and no federal requirement of any type that necessitates the owners of a Delaware LLC to reveal who they are on the public record.


Google chose to be a Delaware corporation so it could go public and raise money, which it did on August 16, 2004. Once it did so, it quickly became one of the richest companies in history. Google's rise to power created tens of thousands of millionaires and a lot of billionaires.


YouTube originally planned on following the Google, Inc. model, but they soon met the real Google people, as well as other investors, and found that cash was available to YouTube without going public.


If capable investors offer you a tremendous amount of money, why disclose who owns you? Why disclose your governance structure or your finances? Why be regulated by the Stock Exchange and the S.E.C.?


If you can get the investors without going to the public markets, you’re much better off keeping it simple. That was the YouTube approach beginning on November 8, 2006, and that’s what makes the company valuable to its owners...whoever they may be.


So, as the next successful entrepreneur, which would you choose?

More By Rick Bell


Comment Facebook Twitter Google Reddit LinkedIn

Leave a Comment


* Required

Email Address:

* Required, will not be published

Website: Comment:  
Secure Connection
X Secure & Confidential

Your personal information is encrypted by Secure Sockets Layer (SSL) software so that it cannot be read as the information travels over the Internet.

X Our customers love us!
We have lots of great customer reviews.
Like our service? If you are one of our many satisfied customers, please let us know.
BBB A+ Rating
X A+ Rated BBB Accredited Business

Need more proof that we're the best? Check out our record!

100,000+ Companies Formed

Companies Formed Since 1981

Disclaimer: Harvard Business Services, Inc. is a document filing service that provides general information. We cannot render legal or financial advice and your use of this site is subject to additional terms and conditions. HBS is not affiliated with Harvard University.

© Copyright 1996-2017. All rights reserved.