What is the difference between a corporation and a limited liability company (LLC)?
In California, the difference between a corporation and a limited liability company (LLC) is that a corporation is a more formal business structure, while a LLC is more informal. A corporation is created when a business registers with the Secretary of State and files articles of incorporation. Corporations have more formal structural and organizational requirements, such as electing officers and directors, holding annual meetings, and keeping meeting minutes. A corporation also requires the payment of corporate taxes and the filing of annual reports. A LLC, on the other hand, is less complex. A LLC can be formed with a single member or with multiple members. The LLC members are not required to elect officers or hold annual meetings. The LLC is also subject to less stringent reporting and tax requirements than a corporation. However, both a corporation and a LLC offer limited liability protection to their owners. This means that the owners of the business are not personally liable for the debts or liabilities of the business. In summary, the main difference between a corporation and a LLC is that a corporation is more formal and has stricter rules and regulations, while a LLC is more informal and has fewer requirements. Both entities offer limited liability protection to their owners, but the corporation has additional reporting and taxation requirements.
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