What are the differences between a corporation and an LLC?

The primary difference between a corporation and an LLC (Limited Liability Company) lies in the forms of protection they offer. A corporation provides shareholders with limited liability, meaning the extent of any losses incurred are limited to the amount of stock a shareholder owns. An LLC, on the other hand, provides members with limited liability protection as well as asset protection. This means that any member’s personal assets, such as a house or car, are protected from creditors in the event the company goes into debt or is sued. In addition, corporations are typically subject to rules and regulations that are laid out in the state’s general corporation law, while LLCs have more flexibility in how they are organized and how they conduct business. LLCs are also more tax efficient than corporations. While corporations are subject to double taxation, meaning income is taxed at both the corporate and individual levels, LLCs are only taxed at the individual level. Finally, corporations are required to follow corporate formalities, such as holding regular meetings, while LLCs may do so at their own discretion. Corporations also have a set number of shares that can be issued, while LLCs may issue as many shares as they see fit. Overall, corporations and LLCs provide different levels of asset protection and offer various benefits depending on the type of business and the goals of the business owners. It is important to consult with an experienced Massachusetts asset protection lawyer to determine which form of protection is best for your specific business and situation.

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What are the differences between a corporation and an LLC?

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