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 if the business owes money or faces a lawsuit for any reason, only the assets of the business itself are at risk. Creditors usually cannot reach the personal assets of the LLC owners, such as a house or car.
LLC has the benefit of being recognized as a separate legal entity from its owners. When forming a LLC corporation, filing with the state is required. The existence of a LLC begins by filing of the Articles of Organization with the Secretary of State and the articles must be in the form prescribed by the Secretary of State. A state-filing fee is required to be paid. Among the required pieces of information are the latest date at which the LLC is to dissolve and a statement as to whether the LLC will be managed by one manager, more than one manager, or the members. To legally complete the formation of the LLC, members have to enter into an Operating Agreement. This Operating Agreement may come into existence before or after filing of the Articles of Organization and may be in writing or oral. Each state may have different rules governing the formation of a limited liability company. Some states may want a publication notice with the local newspaper that a company has been formed. Like corporate by-laws or partnership agreements, the operating agreement can help define the company’s profit sharing, ownership, responsibilities, and ownership changes.
All the profits and losses of the LLC pass through the company to the LLC owners, who report this information on their personal tax returns. A LLC Corporation when it wishes to terminate its existence must file Articles of Dissolution, sometimes referred to as a “Certificate of Dissolution” or “Certificate of Cancellation”. A LLC Corporation is like a partnership but comparatively more flexible and without legal liabilities.
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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...
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Limited Liability Company Agreements
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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 Definition
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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 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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California Corporations
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To conduct business activities in California, you need to be familiar with the business corporation laws of the state. This is because the business corporation laws of California are different from those of the other states of the USA. For example, if your corporation is...
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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 Companies Online
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Limited liability company is similar to a corporation but is suitable for smaller companies with limited number of owners. It is a legal business entity where owners have limited personal liability even if they take part in the management. Similar to sole proprietorships and partnerships,...
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Limited Liability Company Advantage
10 August 2010 8:30 PM |
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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...
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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 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...