What Is A Limited Liability Corporation?

What is the difference between a business that is a corporation,or one that is a limited liability corporation?

• or one that is incorporated? Meaning an ABC Corp., or an XYZ, Inc., or a 123, LLC. What are the differences between incorporation, corporation, and limited liabilty corporation? Are there differences and how are they each different? Thanks for your help. In NJ.

• Answer:

  What Does Limited Liability Company - LLC Mean? A corporate structure whereby the shareholders of the company have a limited liability to the company's actions. Basically, an LLC is a hybrid between a partnership and a corporation. What Does Corporation Mean? A legal entity that is separate and distinct from its owners. Corporations enjoy most of the rights and responsibilities that an individual possesses; that is, a corporation has the right to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes. The most important aspect of a corporation is limited liability. That is, shareholders have the right to participate in the profits, through dividends and/or the appreciation of stock, but are not held personally liable for the company's debts. Corporations are often called "C Corporations". A corporation is created (incorporated) by a group of shareholders who have ownership of the corporation, represented by their holding of common stock. Shareholders elect a board of directors (generally receiving one vote per share) who appoint and oversee management of the corporation. Although a corporation does not necessarily have to be for profit, the vast majority of corporations are setup with the goal of providing a return for its shareholders. When you purchase stock you are becoming part owner in a corporation. What Does Partnership Mean? A business organization in which two or more individuals manage and operate the business. Both owners are equally and personally liable for the debts from the business. Partnership doesn't always mean two people. There are many large partnerships who have thousands of partners.