Limited Liability Company Advantages

Any good business with long term prospects and a view to growth, expansion and profitability needs to be structured in a manner that provides the best and most convenient ways of achieving this. And one of the best and easiest ways of achieving a great business with a solid foundation is by forming a limited liability company, or LLC.

A limited liability company is a type of business ownership that has both the characteristics of partnerships as well as those of corporations. It provides the business owners with only limited liability in case of insolvency. Limited liability means that a business owner’s financial liability is limited only to the amount equivalent to what they invested in the business.

Limited liability companies resemble corporations because both are limited liability entities. Small businesses, partnerships and sole proprietorships do not have limited liability status. An LLC resembles a partnership especially due to the pass-through income taxation. This is a quality that limited liability companies share with sole proprietorships and partnerships.

There are various benefits and advantages that business people seeking to start a business have over other forms of businesses. One of the advantages of an LLC is, of course, limited liability. This means that if the business is ever sued in a court of law, the business owners will not be sued and their private property cannot be touched in settling any debts.

The pass-through income taxation enables the business owner, or owners, avoid double taxation. This basically means that the business owner will be taxed but the business will not be taxed, helping prevent double taxation. The business in the case of an LLC is viewed as a non-entity and cannot be taxed.

Starting and LLC and forming one legally can easily be achieved by following simple steps as explained on the online site www.LLC.NET. This website offers insightful information and a step-by-step guide on how to form and start one. This useful information is available to any business owner or other budding business enthusiasts.

There are no corporate requirements such as ceding power to a board of directors. \Profits may be shared according to pre-agreed arrangements and not necessarily on a 50-50 basis as with partnerships. The business can continue to exist long after the death or illness of the founder, making it easier and flexible to organize continuity of the business.