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

A corporation and a limited liability company (LLC) are two types of business entities commonly found in Washington. The main difference between the two is the amount of protection they provide for the owners. A corporation is a separate legal entity formed by one or more owners. As a result, the owners are not liable for any debts or obligations of the corporation, meaning they can only be held responsible if they have directly caused the damages. On the other hand, an LLC is not a separate legal entity. The owners are directly liable for any debts or obligations the LLC incurs. The liability protection of corporations is a major reason why they are the most commonly used type of business entity in Washington. Corporations can also issue stock, which allows for the company to raise funds by selling ownership interests. Additionally, corporations are subject to certain state and federal taxes, while LLCs are generally only subject to state taxation. In conclusion, the main difference between a corporation and an LLC is the amount of protection they provide to their owners. Corporations provide more liability protection and are typically more widely used. However, LLCs are often used when the owners would like to limit their taxation and liability responsibilities.

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

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