What is the difference between a corporation and an LLC?

The difference between a corporation and a Limited Liability Company (LLC) is significant when it comes to business formation law in Florida. A corporation is a legal entity that is separate from its owners. It has a board of directors and shareholders that own shares of the company, and it can sue or be sued. A corporation is subject to double taxation, meaning it pays taxes on its income and then its shareholders pay taxes on the earnings it pays them. An LLC, on the other hand, is a separate legal entity owned by its members, and decisions are made by the members. An LLC is not subject to double taxation. The taxes are paid by the members directly on their allocated shares of the income. The members of an LLC have limited liability meaning they are not held personally responsible for any debts or obligations of the LLC. Another difference between a corporation and an LLC is the filing requirements and regulations that each must follow. Corporations must abide by stricter filing requirements with annual reports and other requirements from the state. An LLC usually only needs to pay an annual fee to the state. When it comes to business formation law in Florida, the differences between a corporation and an LLC should be understood. Depending on the type of business and the owners’ objectives, one may be more beneficial than the other.

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What is the difference between a corporation and an LLC?

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