| A limited liability company or LLC is a business | | | | reach the personal assets of the LLC owners, such as |
| organization that is a hybrid between partnership or | | | | a house or car. LLC combines the finest features of |
| sole proprietorship and corporation. Limited liability | | | | both the partnership and corporate business structures. |
| corporations are known to allow the most flexible | | | | It allows a pass-through taxation. This means that the |
| management agreements. They also give a lot of | | | | revenue earned from the LLC is only taxed at the |
| freedom regarding allocation of income. This means | | | | individual level, unlike in corporations where it is charged |
| that the members are allowed to distribute the income | | | | at both the individual and the corporate level. |
| in any way they wish, as agreed upon by all of them, | | | | The common disadvantages of LLC are that there is |
| without the need for additional filings. | | | | more paperwork involved in comparison to partnership. |
| Similar to the owners of partnerships or sole | | | | Regarding the dissolution date, in some states, the LLC |
| proprietorships, LLC owners report business profits or | | | | can exist only for a certain period of time. This |
| losses on their personal income tax returns. The LLC | | | | concept seems to be changing though. The LLC does |
| itself is not a separate taxable entity. Like in | | | | not have the ability to raise capital through the equity |
| corporation, in LLC, all owners are protected from | | | | markets, which is an advantage available to |
| personal liability in case of business claims and debts. | | | | corporations. This is a relatively new type of corporate |
| This implies that if the organization owes money or | | | | formation. There are not many legal standards set as |
| faces a lawsuit for some reason, only the assets of | | | | yet with regards to the functioning of the LLC. |
| the organization are at risk. Creditors usually cannot | | | | |