What is the difference between a corporation and a limited liability company (LLC)?
In Florida, corporations and limited liability companies (LLCs) are two distinct forms of business. Both are legal entities that provide limited personal liability to their owners, which means that owners of these entities cannot be held legally responsible for the debts or obligations of the business. The main difference between a corporation and an LLC is that corporations are considered independent legal entities, and their owners do not have any direct responsibility regarding their finances. The owners of a corporation, or shareholders, are not personally liable for the debts or obligations of the corporation. Furthermore, a corporation’s profits are taxed twice: first at the corporate level, and then again when profits are distributed to shareholders in the form of dividends. LLCs, on the other hand, are generally not considered independent legal entities. If there is more than one owner (known as a “member”) of an LLC, they are personally liable for all debts and obligations of the business. Moreover, LLCs are not subject to double taxation. Any profits are only taxed at the individual level, when profits are disbursed to members. Ultimately, it is important to understand the differences between corporations and LLCs when forming a business in Florida, as each has its own advantages and disadvantages. If you are starting a business in Florida, it is important to talk with a lawyer to ensure that the business is set up correctly.
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