What is the Difference Between a Limited Liability Company and a Corporation?
An LLC is a company owned by one or more members. By statute, members of an LLC are granted some liability protection from LLC debts and activities. An LLC can be taxed as a corporation, S Corporation, sole proprietorship or a partnership. A corporation is an entity owned by one or more shareholders who generally have liability protection from corporate activities and debts.
What is the Difference Between a Limited Liability Company and a Corporation? Answer: There are two common types of businesses: • “Pass-through” Businesses Pass-through businesses are those in which the profits and losses of the business pass through to the owners. In other words, the business income is considered as the owner’s income, and the owner pays the tax on his or her personal tax return. • Separate Business Entities Corporations are separate businesses entities. The profts and losses of the corporation are taxable to the corporation, not the owners {shareholders). Corporations are set up as separate business entities. How are LLCs and Corporations Formed? • Limited Liability Company (LLC)Set-up An LLC is formed when one or more business people wants to go into business together. The owners, called “Members,” file Articles of Organization and set out an Operating Agreement. An LLC is a pass-through type of business, because the profits and losses are passed on to the Members d
