| What is an LLC? What's a limited liability company? | | | | personal assets of its owners. It's primarily this reason |
| Many aspiring business owners tend to ask this | | | | that makes an LLC one of the most popular choices |
| question a lot. A limited liability company (or LLC) is one | | | | among new business owners. |
| of the options they hear about when they look up | | | | But this doesn't mean that your personal assets are |
| resources on how to start their own business. It might | | | | always immune. There are some cases, especially |
| even be something that friends might mention to them, | | | | when it comes to fraud or misrepresentation, that a |
| although not everybody knows what it is and how to | | | | court may order an LLC owner to be legally liable for |
| set it up. | | | | any mistakes made by the LLC. |
| First of all, it is not a corporation. This is a common | | | | Even if an LLC protects you in the same way a |
| misconception that people have. Whenever you hear | | | | corporation does, it is much easier to file an LLC. Also, |
| someone say a "limited liability corporation", be cautious | | | | taxes are much more affordable since you only get |
| about the advice they are giving you. The words | | | | taxed for the same income once. If a client pays your |
| "company" and "corporation" mean different things | | | | LLC, you only have to pay taxes on that payment |
| legally. They are not interchangeable terms. | | | | once - via the LLC. You don't need to pay additional |
| Now that you know what a limited liability isn't, let's | | | | taxes when you transfer the profits to your personal |
| explore what it is. The phrase is a clue in itself. | | | | accounts. In a way, you're getting the best of both |
| Basically, a limited liability company is a business entity | | | | worlds - you get to have limited liability but without the |
| that provides "limited liability" to its owners. In other | | | | hassle and expense of filing for a corporation. |
| words, the people who own the company are not | | | | To set up your LLC, you need to look at your state's |
| personally liable for any debts, payments, or legal | | | | specific rules and requirements. They usually ask you |
| trouble that the company runs into. For example, if the | | | | to submit Articles of Organization, which contains the |
| company owes a contractor, the contractor can't | | | | names of the members of your LLC, as well as the |
| demand that the LLC owner pay with his personal | | | | description of the business. You will also need to pay a |
| funds. This is because an LLC creates a firm, legal | | | | small fee. |
| separation between the company assets and the | | | | |