Limited Liability Companies (LLC) offer several advantages over corporations and partnerships. They can be registered in a very short time. The process is simple and the costs involved are not high. Basically, the Articles of Organization (in some states referred to as a Certificate of Organization or Certificate of Formation) and Operating Agreement govern the operations of an LLC. They offer a great deal of flexibility in conducting business. Any or all members can directly participate in the running of an LLC. Alternatively, that job can be left to one member or a group of them, or to a manager or managers.
The liability of members is limited to the extent of their investment in the LLC, except when a member offers a personal guaranty. In this respect an LLC is similar to a corporation. It has an advantage over a corporation in the matter of taxation. There is no double taxation because the procedure for levying taxes is like that of a partnership or S corporation. The amount realized from the sale of assets of an LLC is not usually taxable; with C corporations it is.
There are no limitations on the number of members. Some states even allow single-member LLCs. Transfer of ownership can be done according to the provisions contained in the Articles of Organization or Operating Agreement. Depending on the applicable state law, the lifespan of the organization can be perpetual or for a declared period. An LLC also offers its members’ assets strong protection from claims and lawsuits.
Many changes can be introduced in the structure and operation of an LLC, with the consent of the members. This may not require the filing of additional papers. Members can decide upon the pattern of profit sharing and voting rights in any manner they choose. Unlike a corporation, there is no compulsion to keep minutes of meetings. But maintaining such records can avoid possible misunderstandings and confusion.
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Limited Liability Company Agreements
10 August 2010 8:30 PM |
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A limited liability company, commonly called an LLC is a business organization that is a hybrid between partnership or sole proprietorship and corporation. Like owners of partnerships or sole proprietorships, LLC owners account for business profits or losses on their personal income tax returns and...
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Limited Liability Corporation Forms
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A limited liability corporation is a separate business entity that combines the various characteristics of partnership and corporation to form an entirely distinct legal unit. Limited liability corporations can be broadly distinguished into two forms, namely single-member limited liability corporations and multiple-member limited liability corporations....
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Limited Liability Corporation Definition
10 August 2010 8:30 PM |
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A limited liability corporation can be defined as a unique legal business unit generated from an amalgamation of the various characteristics of partnership and corporation. It has a separate existence distinct from other business models like sole proprietorship, partnership and corporation. Although this concept is...
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Limited Liability Corporation Advantages
10 August 2010 8:30 PM |
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A limited liability corporation is a separate corporate business unit that has a separate legal structure. Although it incorporates many features of partnership and corporation, it cannot be considered similar to either. The unique set of advantages it offers due to its distinct corporate structure...
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Limited Liability Corporation
10 August 2010 8:30 PM |
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A limited liability corporation refers to a business unit that has acquired a unique legal structure. It is different from other forms of business structures, like sole proprietorships, partnerships and corporations. It provides the advantages of a partnership or corporation, while being shielded from the...
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Limited Liability Company Operating Agreement
10 August 2010 8:30 PM |
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An operating agreement is the code by which Limited Liability Companies (LLC) operate. In many states an operating agreement is not compulsory because in its absence the state law will apply by default. That may not be suitable situation for many LLCs, which require specific...
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Single Member Limited Liability Company
10 August 2010 8:30 PM |
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Several states permit the formation and operation of a single-member Limited Liability Company (LLC). The question that arises automatically is why anyone should register himself as a LLC when he can run the business as a sole proprietary concern. The answer is simple – with...
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Limited Liability Company
10 August 2010 8:30 PM |
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The Limited Liability Company (LLC) is a comparatively new form of business entity, which started in Wyoming in 1977. It is neither a corporation nor a partnership, but combines the benefits of both. The persons who have interest in an LLC are known as ‘members’...
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Limited LiabilityCompany Corporations
10 August 2010 8:30 PM |
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A limited liablity company (LLC) is a legal form of company offering limited liability to its members. In a LLC, all members are protected from personal liability in case of business debts and claims and this feature is known as “limited liability.” This means that...
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Nevada Limited Liability Corporations
10 August 2010 8:30 PM |
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The general tax structure and the simplicity in forming the limited liability protection in Nevada is the major cause for various people or many businesses opting for Limited Liability Companies (LLC). Forming an LLC in Nevada makes very reasonable in your tax structure. The taxes...