What governance structures are commonly used in corporations and LLCs?

• A. Sole proprietorship governance is typical for both forms.
• B. LLCs use a board of directors and officers; corporations use member-managed or manager-managed structures.
• C. Corporations use a board of directors and officers; LLCs use member-managed or manager-managed structures.
• D. Corporations are run by a committee of shareholders; LLCs are run by a single CEO.

Answer: (C)

Governance structures define who makes major decisions and who runs day-to-day operations. In a corporation, control rests with a board of directors elected by shareholders, and the board hires officers (like a president/CEO, CFO, etc.) to manage the company’s daily activities. In an LLC, governance is set by the operating agreement and can be member-managed (all members participate in management) or manager-managed (designated managers handle daily operations, while members may have a more limited management role). This is why the correct description matches: corporations use a board of directors and officers; LLCs use member-managed or manager-managed structures. The other options misstate who runs each form—sole proprietorship governance isn’t the standard for these entities, and a board of directors isn’t typical for LLCs, while a single CEO isn’t the universal structure for LLCs or for corporations.