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Limited Liability Company (LLC)
This is similar to a limited partnership, and gives owners limited liability but has some of the capital income advantages of a partnership. There are no restrictions on the number of members and investors who can share in the management of the business. The letters LLC must be included in the business name.
An LLC is similar to a corporation and operates as a separate entity from its members.
Separate entity = something that has its own independent existence.
Limited Liability Company - Advantages
- The advantages of a partnership with the addition of:
- LLC’s limit the liability of the company owners for debts or losses
- The profits of the LLC are shared by the owners without double-taxation.
Limited Liability Company - Disadvantages
- Ownership is limited by certain state laws
- Agreements must be comprehensive and complex
- Beginning an LLC has high costs due to legal and filing fees.