If you are starting a new business enterprise, you face a number of significant decisions. High on the list is deciding what type of legal business entity to establish. For example, you may be debating over whether or not to set up a corporation or a limited liability company (LLC). Before you can make a decision on which type of legal entity best meets the needs of your start-up or other business enterprise, you need to have a basic understanding of a corporation and LLC. You must understand what these legal entities have in common and how they differ.
We have been helping clients set up corporations, LLCs (limited liability companies), and partnerships for 17 years. Let us help you with the following services:
Are shareholders in a corporation liable for corporate debts?
This is the most important attribute of a corporation. In a sole proprietorship or a partnership, the owners are personally responsible for business debts. If the assets of the sole proprietorship or partnership cannot satisfy the debt, creditors can go after each owner’s personal bank account, house, etc. to make up the difference. On the other hand, if a corporation runs out of funds, its owners are usually not liable.
What is a partnership?
A partnership arises whenever two or more people co-own a business and share in the profits and losses of the business.
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