What is the difference between a corporation and a limited liability company (LLC)?
The primary difference between a corporation and a limited liability company (LLC) in Connecticut is how the business is structured and taxed. A corporation is an independent business entity with its own legal identity. It can sue or be sued in its own name. It has a board of directors and shareholders who own it. A corporation also has a complex structure of management, which allows them to create and enforce bylaws and regulations. The main benefit of forming a corporation in Connecticut is that shareholders have limited liability for the debts and obligations of the company. A limited liability company (LLC) is a hybrid business structure that combines the pass-through taxation of a partnership with the limited liability of a corporation. LLCs are not separate legal entities, but rather unincorporated entities in which the owners are personally liable for debts and obligations of the LLC. An LLC in Connecticut allows business owners to divide profits and losses among their members and does not require shareholders or directors, making it easier to manage than a corporation. Both a corporation and LLC provide protection from personal liability for debts and obligations, which is an important benefit of forming a business in Connecticut. However, the best option depends on the specific needs and goals of a business. It is important to consider all of the factors and choose the right business structure that best meets these objectives.
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