A Limited Liability Company

1811 Words Aug 23rd, 2012 8 Pages
iA Limited Liability Company (LLC) is a business structure allowed by state statute. LLCs are popular because, similar to a corporation, owners have limited personal liability for the debts and actions of the LLC. Other features of LLCs are more like a partnership, providing management flexibility and the benefit of pass-through taxation.
Owners of an LLC are called members. Since most states do not restrict ownership, members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit “single member” LLCs, those having only one owner.
A few types of businesses generally cannot be LLCs, such as banks and insurance companies. Check your state’s requirements and the
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* LLCs in most states are treated as entities separate from their members, whereas in other jurisdictions[which?] case law has developed deciding LLCs are not considered to have separate legal standing from their members (see recent D.C. decisions[which?]). * LLCs in some states can be set up with just one natural person involved. * Less risky to be "stolen" by fire-sale acquisitions (more protection against "hungry" investors). * For Real Estate companies, each separate property can be owned by its own, individual LLC, thereby shielding not only the owners, but their other properties from cross-liability.

Limited liability companies are the popular new choice for business start-ups. The "LLC" has only been in existence for roughly 26 years and there are some definite pros and cons.
A limited liability company is a creature of state law. Prior to the late 1970s, it had never been a choice for businesses because it didn't exist. In the late 1970s, the State of Wyoming passed an act creating it. It took another ten years or so before other states caught on. Once they did, the mad rush was on to pass legislation allowing for the creation of LLCs in nearly all states. The world of business entities had been changed forever.
The LLC is a business entity designed to help small business. As a result, most of the positive reasons for using it are catered to such business. In a general view, the entity is heavily
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