Why choose an LLC?
LLCs provide limited liability protection to their owners (called members). Typically, owners are not personally responsible for business debts and liabilities of the company so creditors cannot pursue owners’ personal assets to pay business debts.
Advantages of an LLC
Business owners stand to gain many benefits when they register a company as an LLC. These benefits are, in many cases, unavailable to sole proprietorships and general partnerships. Creating an LLC typically provides the business owner with the following advantages:
- Limited liability protection. Owners are not held personally responsible for business debts and liabilities.
- Pass-through taxation. Typically LLCs do not pay taxes at the business level. Income/loss is reported on the owners’ personal tax returns and any tax due is paid at the individual level.
- No ownership restrictions. LLCs do not face restrictions on the number or type of owners.
- Flexible management. Owners have flexibility in structuring company management.
- Fewer ongoing formalities. LLCs have less annual paperwork than, and do not face the meeting requirements imposed on C corporations and S corporations.
- Credibility. LLCs may be perceived as a more legitimate business than a sole proprietorship or general partnership.
- Consent to add owners. Written consent of LLC members must be obtained prior to increasing ownership in the company or adding new owners.
How do you form an LLC?
To form an LLC, Articles of Organization must be filed with the state and the applicable filing fees paid. With our incorporation service packages, BizFilings handles the whole process for you.
Key Benefits
LLCs provide limited liability protection to their owners, like corporations, so owners are typically not personally responsible for business debts and liabilities. They also provide pass-through taxation, like partnerships, LLC income is reported on the owners’ personal tax returns and any tax due is paid at the individual level.
Business Type Comparison Table
