What is the difference between a corporation and an LLC?
A corporation and an LLC are two different types of business entities. A corporation is a legal entity that is separate from its owners, called shareholders. It has the same rights as a person and can sue or be sued, enter into contracts, and own property. The shareholders are not personally liable for the debts and liabilities of the corporation. An LLC, or limited liability company, is an unincorporated business entity that combines the limited liability of a corporation with the flexibility and pass-through taxation of a partnership. An LLC is owned by its members rather than shareholders, and its members have limited liability for the debts and liabilities of the LLC. There is also no limit on the amount of members an LLC can have. The main difference between a corporation and an LLC is the amount of liability that the owners have. With a corporation, the shareholders have limited liability and are not liable for the debts and liabilities of the company. With an LLC, the members have limited liability but are personally liable for the debts and liabilities of the company. Another key difference between a corporation and an LLC is how they are taxed. Corporations are subject to double taxation, meaning that the corporation pays taxes and then any income received is taxed again when distributed to the shareholders. LLCs, however, are only taxed once, meaning that the income passes through to the members, who are then taxed on their individual returns.
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