What is the difference between a corporation and a limited liability company?

In Texas, the difference between a corporation and a limited liability company (LLC) lies in how each business entity is treated under business transaction law. A corporation is a legal entity that is separate from its owners, and it is typically owned by a group of shareholders. These shareholders have limited liability in that they are not typically personally responsible for the debts of the corporation. At the same time, a corporation is also subject to corporate taxes, and its profits and losses are divided among its shareholders. In contrast, a limited liability company (LLC) is a separate legal entity owned by one or more people, which can include members, directors, managers, and shareholders. These owners of an LLC typically have limited personal liability for any debts or obligations that may arise from the LLC’s business dealings. However, an LLC can also be taxed as a sole proprietorship, partnership, corporation, or some combination of the three. Overall, it is important to understand the distinctions between a corporation and an LLC as each business entity has its own set of advantages and disadvantages. For example, a corporation may provide more protection from personal liability than an LLC, but it is subject to additional taxes. On the other hand, an LLC may provide fewer tax burdens and more flexibility in how it is structured but may also come with more risk of personal liability for its owners. Ultimately, the decision of which business entity to choose will depend on the unique needs and goals of each business.

What is the difference between a corporation and a limited liability company?

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