What are the differences between a corporation and an LLC?

A corporation and an LLC (Limited Liability Company) are two different legal structures that business owners may choose to form their business. Both are popular choices for asset protection in Florida, as well as tax benefits. The major difference between the two entities is in how they are taxed. A corporation is treated as its own legal entity, separate from its shareholders. It is taxed as a separate entity and pays its own taxes. Unlike an LLC, a corporation must maintain separate account books, and shareholders must report any profit and income they derive from the corporation. Corporations also generally require more paperwork and formalities than LLCs, such as holding annual shareholder meetings. An LLC combines some features of a corporation and a partnership. It is treated as its own legal entity, separate from its owners, and it is taxed as a separate entity. However, LLC members are not taxed on the LLC business profits. Instead, the profits and losses pass through to the members and are reported on their individual tax returns. LLCs are also simpler to form than corporations and generally do not require regular meetings or filings. Overall, a corporation and an LLC are both viable options for asset protection in Florida. The differences between them mainly relate to taxes and the level of paperwork and formality required to maintain them. It is important to understand both forms of businesses and how they work in order to choose the best one for your business.

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