"Company" and "Business"
The Free Legal Dictionary defines the word "company" as "any formal business entity for profit," that is, any formal organization designed to make money. The Free Legal Dictionary defines the word "business" as "any activity or enterprise entered into for profit." This definition includes companies, but also includes street vendors or even one-time commercial transactions. The IRS draws a distinction between "business" or “company” and "hobby." Businesses and companies are intended to make to make a profit, even if they sometimes lose money. The IRS does not view hobbies as profit-oriented, even if you occasionally make money from them.
Legal Liability Company
Many people refer to LLCs as "legal liability corporations," according to the Free Legal Dictionary. This is incorrect. Most LLCs are not legally designated as corporations. LLCs are designed to allow their members to shield their personal assets from liability related to the business of the company. Members of an LLC may be individuals, corporations or even other LLCs. Profits from an LLC pass through the company to individual members, who pay federal income tax, including self-employment tax, according to Bankrate.com
Company vs. Corporation
By definition, every corporation is business and a company. This includes sole proprietorships, partnerships, LLCs and corporations. However, only corporations must legally include a designation such as "Incorporated" or "Corporation" as part of their names. A corporation is a complex legal and financial structure that establishes the company a a separate entity for legal and tax purposes. A corporation may sue and be sued and must pay corporate income taxes. The term "double taxation" refers to the fact that profits of a corporation are subject to corporate income tax, while individual stockholders must also pay taxes on dividend income they receive from the company, according to Business.gov.
LLC vs. Corporation
LLCs differ from corporations in that they do not pay corporate income tax, issue stock or have a board of directors. Some LLCs obtain status as an S corporation from the IRS, which allows their members to escape paying self-employment tax without imposing the requirements of issuing stock or paying corporate income taxes. S corporation status also imposes stringent size and structure limitations on the LLC, according to Business.gov.