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LLC vs. C Corporation

LLC vs. C Corporation

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LLC vs. C Corporation

An LLC and a C corporation can both be limited liability companies. In either case, the company may have many shareholders, owners and employees. However, an LLC can have one single person that composes that entity, and that person would still have limited liability in relation to company issues, as they are not an individual, but part of the entity in the eyes of the law.

 

A C corporation and LLC may be taxed similarly. In either case, the profits of the company may be taxed two times. The profits may first be taxed at the point that it is income for the company and again when it is distributed as dividends or employee salary, as a portion of individual income.

 

A C corporation may be a publicly traded company, with the public owning shares of the company. Wheres an LLC is likely a privately owned company with a limited number of shareholders, who may be the only owners of that company. In many cases, only majority shareholders have a say in how a C Corporation can be run. The shareholders in a smaller LLC would likely be allowed to have input depending on the individual LLC's operating agreement.

 

An LLC and a C corporation are both companies in which individual employees, shareholders and owners are protected from liability in regards to the actions of the company. However, in either case individuals can be held liable if they acted alone or without permission from the company.

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