What is a limited liability company?

Limited liability company, also known as a limited liability company (LLC), is a type of business ownership that determines many aspects of the way the company is operated. He shares some aspects with a privately owned company, some with partnership and others with corporation. There are both advantages and disadvantages for the establishment of a company with this type of structure. First, the owner or owners of the company who will be called "members" must submit organizational articles with the state minister of the state. Each state has specific laws on how these articles should be written.

Members of the company must then pay the required fees of the state. Each state also has instructions on other matters that may be required, such as submitting an operating agreement or a public announcement of the creation of a company. Once a limited liability company is created, the members will gain all the advantages of the structure, such as Myll as all disadvantages.

One of the main advantages of a limited liability company is that, as the name suggests, the responsibility of the members is limited. Members of the company do not responsible for their debts because it is considered an independent individual in itself. All debts are the company's responsibility and cannot be handed over to its members. In this way, the company operates in almost the same way as corporations, but with fewer limitation and requirements of members.

For example,

corporations have the disadvantage of double taxation. The company is taxed from its profits and members are taxed from their income. In a limited liability company, the company is not taxed from its profits. Each member pays tax for their own profits. This is known as flow through taxation .

While a limited liability company has different advantages for its members with a disadvantage over other types of business. It has much more paperwork and different rules that need to be followed than partnership or exclusive protection. In addition to himThe power of the members of the company's operation or are considered investors. If investors are members, then their share in the company is considered to be security. The rules of the Securities and Stock Exchange Commission (SEC) will require multiple paperwork and regulations unless the company qualify for an exception.

with many advantages and disadvantages when creating a limited liability company, business owners and investors have to consider a lot. This ownership structure is not a perfect type of business for every business, but many consider it safe and advantageous.