The business structure know as a limited liability company, or LLC, is easiest described as being a hybrid between a partnership and a corporation. To put it simply, limited liability company give a business the best parts of a corporation without all of the protocols usually associated with a corporation.

The multiple owners, called members, of an LLC get treated like a partnership for tax purposes. It is a pass-thru tax structure, so income taxes are paid by its owners, so, unlike a corporation, the LLC itself never pays income tax.

An LLC does not suffer from the double-taxation problem that a corporation does. In other words, because the tax burden is passed on directly to the owners, income tax is paid just one time. However, an LLC is still obligated to pay state (assuming there is any) and federal payroll taxes.

At the time of form an LLC, you choose how you choose the tax treatment desired. You can handle income taxes as if you were a sole proprietor, a C corporation, or an S corporation. The choice is yours.

Assuming that the LLC is set up correctly, and personal and business happenings are completely separated, the members are afforded personal liability protection. This is a big reason why people choose to form an LLC instead of running a business as a sole proprietor. You should also consider that a company earns more respect when it has a formal business structure, such as a limited liability company.

Form LLC is performed by someone who does not necessarily need to be a member. There are actually several very reputable online companies that will form your LLC for a very reasonable cost, which means you are assured that the structure is properly set up.

A member’s monetary liability is limited to the financial contribution made by that member. When you are operating as a limited liability company, you can bring in multiple partners, who can be active in the company, or serve as silent investors.

A limited liability company is a business organization, or business structure, that is very very much like a corporation, but allows its owners more flexibility. Creating an LLC with an online incorporation company is most suitable for a smaller business in which the number of owners is limited.

The limited liability company is a relatively new type of business entity, at least in the US. As a matter of fact, as early as 1986, you could create an LLC in only two states. Now, you can form a limited liability company in every state.

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