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A Limited Liability Company (LLC) is a business structure that combines elements of a corporation and a partnership. LLCs were first approved in Wyoming in 1977 offering their services across the US and with the IRS. LLCs offer limited liability protection like a corporation but also allow for the pass-through taxation advantages that are available to partnerships.
There is less paperwork involved and legal protection that comes with an LLC, which is why their popularity has increased. Unlike corporations, LLCs have minimal legal requirements. And unlike partnerships, they provide a shield against personal liability for the owners. This form of business entity has been adopted by well-known firms like Amazon and Chrysler.
A Limited Liability Company (LLC) is a modern business structure that blends the benefits of a corporation with those of a sole proprietorship or partnership. This unique combination provides numerous advantages that are not available collectively in other business structures.
Because an LLC is legally distinct from its owners, it means that the members’ personal property such as houses, cars, and banks are protected when issues concerning the business arise. LLC members enjoy the same restricted liability protection as corporate shareholders where their risks are limited to the investment they have made in the LLC.
Ownership of LLCs comes with no cap, and members of the Company can be of any nationality. S-Corporations on the other hand, come with ownership restrictions. Only US Citizens or residents can own S-Corporations and their number is limited to 100 only. Unlike S-Corps, LLCs do not carry these restrictions, thus making them more favorable.
In recent years, LLCs have gained popularity, partly because of their easy-to-maintain structure and the money-saving tax breaks they offer. An LLC gets taxed only once, similar to how a corporation or partnership tax their earnings. This is called pass-through taxation. An LLC has much more leeway in terms of business ventures when compared to sole proprietorships and general partnerships, which don’t offer limited liability protection. S Corporations do give limited liability, but they are also more burdensome for the owner.
Capital can be raised in several ways by an LLC. New members can be added through selling membership interests, or different classes of members can be created which come with their own rules for voting and profit-sharing.
Selling ownership stakes to outside parties is also an easier process as it doesn’t interfere with how the business is operated, unlike an LP or GP. S Corporations and Limited Liability Companies allow for a more restricted form of selling the ownership stakes when compared to sole proprietorships and partnerships. Without numerous conditions, general partnerships and sole proprietorships face a lot of hassle when transferring assets, business accounts, licenses, permits and other legal documents.
Because an LLC is legally distinct from its owners, it means that the members’ personame restricted liability protection as corporate shareholders where their risks are limited to the investment they have made in the LLC.
Just as with general partnerships, an LLC can take any form of organizational structure which the members agree on. This means that profit shares may be divorced from voting rights. This gives the owners complete freedom to merge or segregate the interests of the company’s investors and the people managing the company’s daily operations.
An LLC provides personal liability protection, whereas a sole proprietorship does not, meaning your personal assets may be at risk in case of legal issues.
The processing time varies by state, but typically takes between 2 to 7 business days.
Yes, LLC owners enjoy pass-through taxation, meaning business income is reported on their personal tax returns, potentially reducing overall tax burdens.
LLCs are ideal for freelancers, startups, e-commerce businesses, agencies, and small businesses looking for legal protection.
Yes, you can request a name change, but additional fees and paperwork may be required.
We will prepare and file your LLC application in a professional manner, all you need to do is complete our simple order form.
Our company offers professional business filing services that ensure your company documents and applications are accurately filed and in compliance.
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