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Limited
Liability Company (LLC)
A Limited Liability Company can be best described
as a hybrid between a corporation and a partnership.
It provides easy management and "pass-through"
taxation (profits and losses are added to the owner(s)
personal tax returns) like a Sole Proprietorship/Partnership,
with the liability protection of a Corporation. It's
a relatively new form of business created about 20 years
ago and now recognized in all 50 States and D.C.
Like a corporation, it is a separate legal entity;
unlike a corporation, there is no stock and there are
fewer formalities. The owners of an LLC are called
"Members", instead of "Shareholders"
"Directors" and "Officers".
So in essence, it's a like a corporation, with less
complicated taxation and stock formalities.
The heart of a Limited Liability Company is known
as the "Operating Agreement". This document
sets the rules for operating the company and can
be
modified as the business grows and changes. Our LLC
Formation Service
includes a fully personalized Operating Agreement
(as well as an editable copy in Microsoft Word
format) for you to modify as the company
changes.
Operating an LLC is less formal than a corporation,
usually only requiring an Annual Member's Meeting and
Member's agreeing to changes of the Operating Agreement.
Click here for Frequently
Asked Questions about LLC's
PROS: Provides the liability protection of a corporation without
the corporate formalities (Board Meetings, Shareholder
Meetings, minutes, etc.) and extra levels of management
(Shareholders, Directors, Officers). Taxed the same as a Sole Proprietorship
(1 Member LLC) or Partnership (2 or more Members).
CONS: Usually more expensive to form than
a DBA, requires more
paperwork and formal behavior.
The Lowdown: The Entity of Choice for 1-5 person
startups, has recently surpassed Corporations in
popularity. Easy management and limited compliance
requirements have made the LLC the user-friendly solution for
small business.
How to Get Started: You can start
right now. We can form your LLC in any of
the 50 States and D.C.
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