What is the difference between a corporation and a limited liability company?
The main difference between a corporation and a limited liability company (LLC) in Washington is in their legal structures and the liabilities associated with them. A corporation is a legal entity that is separate from its owners and is formed under state law. It can have its own bank accounts, legal rights, and responsibilities. Its investors or shareholders are not held personally liable for any debts or liabilities of the company. An LLC is privately owned and managed and is also a separate legal entity from its members or owners. Unlike a corporation, LLC members are not shareholders and do not have voting rights in decision-making. They have limited liability protection, meaning their personal assets cannot be used to satisfy the debts or liabilities of the company. In Washington, both types of business structures have advantages and disadvantages. Corporations offer a greater degree of flexibility and more opportunities for capital investments and larger scale business operations. However, they can also have higher costs associated with their formation and maintenance. LLCs are simpler to form and maintain, and they also provide their owners with a measure of financial protection. However, their level of protection from creditors may not be as high as that of a corporation.
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