Most founders arrive at this decision having read that an LLC is simpler and a corporation is for companies that raise money. Both statements are roughly true and neither is the reason the decision usually goes one way or the other.

The question that settles it is who will own the business, and what those owners will need from it.

What the two forms actually differ on

An LLC is owned by members and governed by an operating agreement. That agreement is where the real flexibility sits: economic rights, voting, transfer restrictions and management structure are largely whatever the members write down. By default the entity is not taxed itself: profits and losses pass through to the members, who report them individually.

A corporation is owned by shareholders, directed by a board, and run by officers. Its structure is prescribed by statute rather than negotiated, which is less flexible and considerably more predictable. A C corporation is taxed on its own income, and shareholders are taxed again on distributions. An S corporation election avoids that second layer, but comes with restrictions on who may hold shares and how many classes of stock may exist.

Where the money is coming from usually decides it

If the business will raise institutional venture capital, the answer is almost always a corporation, and usually a Delaware one. Venture funds are structured in ways that make holding LLC interests awkward or impossible for their own investors, and the documents they use assume corporate stock. Converting later is possible but costs money and time at precisely the moment neither is available.

If the business will be funded by its founders, by revenue, or by a small number of individuals who know each other, an LLC is usually the better fit. The flexibility is real, the administrative burden is lower, and the pass-through treatment avoids a layer of tax that a small operating business rarely benefits from carrying.

If foreign owners are involved, the analysis changes again: an S election is unavailable, and the tax treatment of an LLC in the owner's home country may not match its treatment here. That combination is worth working through before formation rather than after.

Two New York specifics that surprise people

The publication requirement. A New York LLC must publish notice of its formation in two newspapers designated by the county clerk, once a week for six consecutive weeks, and then file a certificate of publication with the Department of State. The cost varies sharply by county and is substantially higher in New York City than elsewhere. It is a real line item, and it catches founders who budgeted only for the filing fee. Corporations have no equivalent obligation.

Biennial statements. Both forms must file a statement with the Department of State every two years. It is a small administrative task, and it is also the one most often missed by businesses that formed an entity and then moved on.

Where you incorporate is a separate question

Choosing a form and choosing a state are different decisions, and conflating them is common. A business operating in New York generally has to register here regardless of where it was formed, so incorporating in Delaware does not avoid New York obligations, it adds a second set to them. That trade is worth making when investors expect it, and often is not otherwise.

The part that outlasts the choice

Whichever form is chosen, the document that matters most is the one governing the relationship between the owners: the operating agreement for an LLC, the shareholders' agreement and bylaws for a corporation. What happens when a founder leaves, how a deadlock is broken, who may sell to whom and on what terms: these are cheap to settle at formation and expensive to argue about later.

The entity type is a decision of an afternoon. The ownership terms are the ones that will still be governing the business in ten years.