a small description of corporation and limited liability company

Expert Solution

Corporation:

It is an entity that is separate from its owners
It has every right to enter into a contract, borrow money, loans, sue or get sued
The shareholders may receive an of the profit in the form of dividends but are not entitled to the company's debt
The shareholders have voting rights to elect the board members
On liquidation of the company first, the creditors are paid then the rest is given back to the shareholders

LLC:

It is a hybrid structure of corporation and partnership where owners are not personally laible for company's debt
There is one article of orgaization which mentions the rights, powers, duties, liabilities, and other obligations of each member of the LLC
LLC need not have to pay tax as the income is shown in the personal tax returns of the members
In case of frauds or illegal reporting creditors can go after the members
If anyone among the members dies or goes bankrupt then LLC might get dissolved

jeff jeffy answered 1 year ago

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