The easiest, most flexible way to launch your business
Shield your personal assets from business liabilities.
The flexibility to run your business as you wish.
What is a Limited Liability Company (LLC)?
A corporate structure where the members of the company cannot be held personally liable for the company’s debts or liabilities is what Limited Liability Company known as. If we simply put, then this the least complex business structure as it gives you the perk of pass-through taxes, limited liability (obviously), and legal protection for your personal assets. There may be different regulations for the different states, so if you are interested in starting a limited liability company then you first check it with your state.
In conclusion of the above lines means that the owners are not personally responsible for business debts and liabilities of the limited liability company so creditors cannot pursue owners’ personal assets to pay business debts. Most of the states also permit “single-member” LLC’s, those having only one member.
Advantages of LLC
- Limited liability company provides you limited liability protection which means that owners are not are not held personally responsible for business debts and liabilities.
- There is flexibility in allocating profits and losses among its various owners.
- Not limited to only one class of ownership. LLC can have different classes of ownership.
- It may help your business be perceived as a more legitimate business than a sole proprietorship or general partnership.
- To increase ownership in company and add more new members, one has obtain written consent prior.
- Without going through any corporation formalities you can still have benefits similar to a corporation.
Disadvantages of LLC
- If company faces bankruptcy or any member of the company dies then LLC’s generally dissolves as it has a limited life.
- Because of having no shares or shareholdings, LLC’s cannot go public. Issuing shares to employees through stock option is not available for the same reason.
- Complexities and paperwork associated with LLC’s are significantly less than those required for forming corporation but still its formation is still significantly more complex than a partnership or sole-proprietorship.