What is the difference between a corporation and a limited liability company (LLC) in Rhode Island?
Both a corporation and a limited liability company provide asset protection against claims against your personal assets. The main difference between the two involves the treatment of profits and losses for income tax purposes. A corporation is a taxable entity and pays taxes on its profits. A limited liability company does not pay taxes on the corporate level, but its profits and losses are taxed on each member’s own tax return. In a corporation the owners are referred to as shareholders and in a limited liability company the owners are referred to as members. The chief executive officer of a corporation is the President. The chief executive officer of a limited liability corporation is the Manager.
