The Limited Liability Company (LLC) is a flexible form of entity that is designed to provide the protective features of a corporation, with the tax advantages and operational flexibility of a partnership. The LLC is a popular choice for small business owners who are looking to form a limited liability entity simply to protect personal assets, or to secure additional loans. Depending on the individual’s goals, an LLC may be ‘manager managed’ or ‘member managed’. A ‘manager managed’ LLC is structured more like a limited partnership, whereas a ‘member managed’ LLC is like a general partnership.
What are the main advantages of forming an LLC?
- Members and managers of an LLC have limited liability for business debts, whereas, in a limited partnership (LLP), only the partners have limited liability
- The allocation of profit and loss of an LLC need not be proportional to membership interests
- An LLC is not subject to the threat of double taxation since the LLC is not a separate taxable entity, unlike a corporation
- In order to own or invest in an LLC, you do not need to be a US citizen
If you are interested in learning more about forming an LLC, please contact us at 714-384-6580