What is the difference between a corporation and a limited liability company (LLC)?
A corporation and a limited liability company (LLC) are two different types of business entities that offer their owners particular types of protection from liability and taxation. In Oklahoma, a corporation and an LLC are both established by filing articles of organization with the Oklahoma Secretary of State. A corporation is an entity that is separate and distinct from its owners and creates an entity with a perpetual life; meaning it exists beyond any of the incorporators. Owners of a corporation are called shareholders, and they are granted shares of stock to signify ownership. A corporation is taxed separately from its owners, and shareholders have limited liability protection, meaning they are only responsible for the amount of money they invested into the corporation. On the other hand, an LLC is a business structure that combines aspects of both a corporation and a partnership. LLCs are designed to provide owners with limited liability protection while also taking advantage of the pass-through taxation like a partnership. Unlike a corporation, LLCs can have an unlimited number of members, and they are not required to have share certificates. In Oklahoma, both a corporation and an LLC offer their members protection from personal liability and certain tax advantages. However, the structure, tax treatment, and liability protection are different for each type of entity. It is important to consider which entity is best for your business before making any decisions.
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