What are the differences between a corporation and an LLC?

A corporation and an LLC (Limited Liability Company) are two different types of entities used in business and both offer asset protection. However, there are important differences between the two. One major difference between a corporation and an LLC is the treatment of personal liability. Corporations are “separate legal entities” from their owners, meaning that the owners are not personally liable for any of the obligations or liabilities of the corporation. On the other hand, LLCs provide their owners with “limited liability,” which means that owners are not liable for the obligations of the company beyond their contributions. Another difference between the two is in the way ownership is structured. Corporations are owned by shareholders who elect a board of directors to oversee the company. Owners of LLCs have much greater control over the management and operation of the business, as they are not beholden to a board of directors. When it comes to taxation, corporations and LLCs have different treatment. Corporations are subject to “double taxation” on profits, meaning that the profits are taxed at both the corporate and individual level. LLCs are taxed as a “pass-through” entity, meaning that the profits of the business are taxed only once to the individual. In Indiana, both corporations and LLCs can be used to protect assets and both offer benefits for businesses. It’s important to understand the differences between the two, so that you can make an informed decision about which is best for your business.

Related FAQs

Are there any risks associated with asset protection planning?
How can asset protection law help me?
What is an irrevocable trust used for?
What is the difference between an irrevocable trust and a revocable trust?
Can an asset protection trust help me avoid probate?
What are "charging orders" in asset protection law?
What types of assets can be protected by asset protection law?
What is the importance of asset protection planning for business owners?
What is a foreign asset protection trust?
How do I find a qualified asset protection attorney?

What are the differences between a corporation and an LLC?

Related FAQs

Related Blog Posts