Benefits of A Limited Liability Company (LLC's)

The Limited Liability Company can enjoy the benefits of the corporate liability shield and its
owners can choose to be taxed as sole owners (the nature of a sole proprietorship) or as a
corporation or a partnership.

The LLC can be member-managed (if it is formed to be owned by members) or managermanaged.
Member-managed resembles a partnership and manager-managed resembles a
corporation.

A major advantage of the LLC is that profits can be passed through to the owners, resulting in
taxation only at the owner level (if the LLC elects not to be taxed as a corporation). An
advantage is that the owners need not report to a Board of Directors.

Advantages of An LLC

Limited Liability.  Members are protected from personally liability for business decisions or actions of the LLC.  This means that if the LLC incurs debt or is sued, members are not required to satisfy the claims with their personal assets. This is similar to the liability protections afforded to shareholders of a corporation.  Keep in mind that limited liability means ìlimitedî liability - members are not necessarily shielded from their or their employees' tort actions, such as accidents.

Less Recordkeeping. An LLCís operational ease is one of its greatest advantages. Compared to an S-Corporation, there is less registration paperwork and there are smaller start-up costs.

Sharing of Profits. There are also fewer restrictions on profit-sharing within an LLC, as members distribute profits as they see fit. Members might contribute different proportions of capital and sweat-equity. Consequently, it's up to the members themselves to decide who has earned what percentage of the profits or losses.

Advantages of A Limited Liability Company

Limited Liability.  Members are protected from personally liability for business decisions or actions of the LLC.  This means that if the LLC incurs debt or is sued, members are not required to satisfy the claims with their personal assets. This is similar to the liability protections afforded to shareholders of a corporation.  Keep in mind that limited liability means ìlimitedî liability - members are not necessarily shielded from their or their employees' tort actions, such as accidents.

Less Recordkeeping. An LLCís operational ease is one of its greatest advantages. Compared to an S-Corporation, there is less registration paperwork and there are smaller start-up costs.

Sharing of Profits. There are also fewer restrictions on profit-sharing within an LLC, as members distribute profits as they see fit. Members might contribute different proportions of capital and sweat-equity. Consequently, it's up to the members themselves to decide who has earned what percentage of the profits or losses.