What is the difference between a corporation and an LLC?

A corporation and limited liability company (LLC) are two types of business organizations. Both offer some liability protection for their owners, but there are some important differences. A corporation is a legal entity that exists separately from its owners. Corporations can be publicly traded or privately held and the owners of corporations are shareholders. Shareholders have limited liability and cannot be held personally liable for the debts of a corporation. The management of a corporation is governed by state and federal laws, as well as by its articles of incorporation, bylaws, and shareholder agreements. An LLC, on the other hand, is a type of business organization that is owned by its members, who are often referred to as “members” or “managing members.” Unlike a corporation, an LLC provides more flexibility when it comes to how it is managed and structured. Unlike a corporation, its members have limited liability protection and cannot be held personally liable for the debts of the LLC. In addition, LLCs are not subject to the same corporate formalities as corporations, such as the requirement to hold annual shareholder meetings. Overall, the main difference between a corporation and an LLC is the amount of liability protection provided to the owners. Corporations have greater liability protection than LLCs, but LLCs offer more flexibility and are not subject to corporate formalities.

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What is the difference between a corporation and an LLC?

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