Limited Liability Corporations

A Limited Liability Corporation (or LLC) is a type of corporation that combines the benefits of a corporation as well as a partnership. Owners of an LLC are subject to the tax benefits of a partnership, while still enjoying the status and limited liability of a corporation. 

Start-up entrepreneurs and owners of home-based businesses have a new option in deciding how to legally and structurally organize their companies: the Limited Liability Corporation (LLC). LLC businesses offer many of the advantages of both corporations and partnerships, with only a few of the drawbacks they incur. The LLC title can be attached to any on of the three previously established forms: sole proprietorship, general partnership, and corporation. 

Some feel that LLC companies provide owners, directors and shareholders with the maximum amount of flexibility afforded to a business. This can include tax breaks, shareholder benefits, insurance discounts and other benefits that can help a new or expanding business operate more smoothly. 

There are obvious problems and drawbacks to the other types of businesses run in the United States. An S-Corporation provides significant tax advantages, but is limiting in several areas including stock ownership and investment. A partnership, on the other hand, provides increased ownership and investment flexibility than the S-Corporation, but it does not have the protection of individual limited liability that is found in an S- or C-Corporation. 

Over the last decade, LLC’s have become a viable and attractive option for entrepreneurs all over the United States. Essentially, the LLC is a hybrid entity that not only provides tax breaks and suitability options, but also protects the owners – or “members”, as they are called – from liability issues concerning the corporation.