A Limited Liability Company (LLC) is a type of business structure that provides limited liability to its owners in many jurisdictions. It is a hybrid legal entity having certain characteristics of both a corporation and a partnership or sole proprietorship, depending on how many owners there are. LLCs are not corporations under state law, but they are a legal form of a company that provides limited liability to its owners in many jurisdictions. LLCs are well known for the flexibility that they provide to business owners.
Here are some key features of an LLC:
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Limited Liability: LLCs offer limited liability protection to their owners, meaning that the owners cannot typically be held personally responsible for the business debts and liabilities.
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Pass-through Taxation: LLCs are taxed on a “pass-through” basis, meaning that the profits and losses of the business are passed through to the owners, who report them on their individual tax returns.
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Separate Legal Entity: An LLC legally exists as a separate entity from its owners.
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Regulation: Regulation of LLCs varies from state to state.
LLCs are a popular choice among small business owners for the liability protection, management flexibility, and tax advantages they provide. They are easier to set up than corporations and provide more flexibility and protection for their investors.
