Difference between c-corp,s-corp,llc and ltd. in non business language?
The two main reasons why someone would form a business entity like a corporation are 1) for limited liability protection and 2) tax advantages. With limited liability protection, your personal assets are shielded from liability. In a corporation, shareholders are generally not responsible for company debts and obligations. A shareholder’ s risk is limited to his/her investment in the company. LLCs (limited liability companies) also provide limited liabilty protection for their owners. Without an entity, if you are operating as a one-man show, you are a sole proprietor–and sole proprietors have absolutely no liability protection. If the business owes money, you owe money. If a plaintiff or a creditor goes after the business, they actually go after you. The tax issue is a bit more complex. At the most basic level, a tax benefit can first be achieved by reducing one’ s net taxable income. Theoretically, the lower the amount of net taxable income you have, the less taxes you pay. So, obvi
