An enterprise (often a sole proprietorship) is a simple, low-cost business structure with unlimited personal liability, this means that the person running the business is personally liable for liabilities.

Whereas an LLC (Limited Liability Company) is a separate legal entity providing liability protection for personal assets. This means that the members of a Limited Liability Company are not liable for the liabilities of the company.

Enterprises suit small, one-person operations, while Limited Liability Companies are better for growth, credibility, and protecting personal assets from business risks.

Key differences:

1. Liability: Enterprise owners are personally liable for all business debts; LLC members are generally not personally responsible for company debts because the company has a legal personality which is separated from the member’s personality.

2. Formation & Cost: Enterprises are easy/cheap to form with minimal paperwork; Limited Liability Company require formal registration and stricter compliance.

3. Taxation: Enterprises are taxed, but Limited Liability Company have more options.

A Limited Liability Company with an annual turnover under ₦100 million are not required to charge or file VAT.