What are the differences between a corporation and an LLC?

The main difference between a corporation and a Limited Liability Company (LLC) is the way they are structured and run. A corporation is a more formal entity where shareholders, or owners of the corporation, elect a board of directors to oversee the organization. The board of directors is responsible for making decisions and managing the business on behalf of the shareholders. The shareholders’ liability is limited to their investment in the corporation. An LLC on the other hand, is a more informal business structure. The members of an LLC are not required to be elected by shareholders and are not responsible for decisions made by the LLC. Instead, the members of an LLC are responsible only for the capital they have invested in the LLC. The members of an LLC are not liable for any debts or liabilities incurred by the LLC. Other differences between a corporation and an LLC include how they are taxed. Corporations are subject to double taxation, meaning that the profits are taxed both at the corporate level and at the personal level. An LLC is not subject to double taxation, so the profits are only taxed once when they are distributed to the members of the LLC. In Nevada, LLCs are popular because they provide asset protection from creditors and are not subject to double taxation. Corporations are still a popular choice for businesses that want to establish a corporate identity, or to raise capital, but the LLC may be the preferred entity for businesses seeking the most asset protection.

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