A Limited Liability Company is a business entity whose owners are not held personally responsible for the losses and debts incurred by the business. In other words, it allows the investor to keep their personal assets separate from those of the business. The amount of liabilities borne by the investors is limited only to the amount of initial investment. As such, the Limited Liability Company is viewed as a separate entity on its own that can even be sued by other companies and can also serve as a director in another company.
Limited liability companies grant their directors immunity from taking any personal responsibility for losses or liabilities arising from the business or any bad judgments made against the business. Should there be a loss, you won't lose any personal belongings. Instead, the company's assets will be sold off to cover the debt. Make yourself one of the luckiest person who learn about the c corporation definition.
Limited liability companies enjoy greater tax flexibility. This is because the IRS does not consider a Limited Liability Company as a separate entity for the purposes of taxation, at least not initially. When it comes to determining a mode of taxation, the IRS gives the owners of a LLC the option to choose how they want to be taxed. A Single Member Limited Liability Company is taxed like a sole proprietorship business while a Partner in a Limited Liability Company is taxed like a traditional partnership. A Limited Liability Company files its taxes like a corporation.
LLCs require less paperwork to form. This brings about more flexibility as compared to other alternatives like C-Corps and S-Corps. You don't have to move between many attorneys just to get your business running. An LLC is a separate entity from its owners. This means that it will continue to operate even after the demise of its directors. This provides some level of security to the employees and other parties with vested interests in the company. If you are interested in advantages of llc, please click the link provided.
When registering a new LLC, you also have to register a company name that uniquely identifies it in the marketplace and sets it apart from the rest. The company name that you choose is set apart and secured from the date of registration. However, it is not mandatory for the company to start trading immediately and therefore you can reserve a company name for later use.
You can have employee shareholders. In some instances, a company may choose to reward its prolific or best performing employees with some shares of the company. This helps a company to retain its best talents and curb staff attrition.