The members may have to pay self-employment taxes and make periodic estimated tax payments on their share of the LLC's income. An LLC may be organized to be managed by its members or by one or more managers. If an LLC is managed by its members, the members have the same broad managing authority as a partner in a general partnership. On the other hand, if the LLC is managed by one or more managers, the manager's authority resembles the managing authority of a partner in a general partnership, while the members are merely investors in the company. A corporation is an artificial entity that receives its legal existence from a charter granted by the state.
Stockholders receive their stock from the corporation in exchange for money, property or services.
To form a corporation, articles of incorporation must be filed with the state, bylaws and minutes of preliminary meetings must be drafted, and filing fees and expenses paid. The stockholders usually elect a small group of directors to set the corporation's policies. The directors then elect officers such as president, secretary and treasurer to carry out the normal business functions. In some cases, yes. Risk is a fundamental aspect of every business.