Limited Liability Company (LLC) by Will Kenton

TL;DR - LLCs limit members’ liability by separating a company’s business assets from the personal assets of the members.

Helpfulness - 3

Tags - LLC, partnership, taxes, debts, liabilities, corporation

Questions answered:

  • What is a Limited Liability Company?
  • How does an LLC compare to a partnership?
  • What are advantages and disadvantages of LLCs?

Summary:

  • Members are not personally liable for their company’s debts or liabilities (like a corporation).
  • LLCs have characteristics of a corporation and those of a partnership/sole proprietorship.
  • LLC regulations vary from state to state.
  • LLCs can choose to list profits and losses on the personal tax returns of owner(s), and thus not pay federal taxes (like a partnership).
  • Compared to a corporation, LLCs are easier to set up and provide more flexibility and protection.
  • LLC members’ wages are listed as operating expenses.

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