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A Limited liability company (denoted by L.L.C. or LLC) is a type of legal entity which has only relatively recently been made possible to establish in the United States and many other, mainly anglophone, countries. An LLC is similar to a corporation and a limited liability partnership. A variant of the LLC available in some jurisdictions, typically limited to licensed professionals such as lawyers or engineers, is the professional limited liability company (denoted by "P.L.L.C." or "PLLC"). A legal entity is a legal construct through which the law allows a group of natural persons to act as if they were an individual for certain purposes. ...
An anglophone is someone who speaks English natively or by adoption. ...
A corporation is a legal entity (distinct from a natural person) that often has similar rights in law to those of a Civil law systems may refer to corporations as moral persons; they may also go by the name AS (anonymous society) or something similar, depending on language (see below). ...
Limited liability partnerships (LLP) are a form of business organization. ...
The concept of an LLC was apparently modelled after the German GmbH (Gesellschaft mit beschränkter Haftung; LLC is a broad translation of the term). These have existed in German-speaking countries for some time—in Germany itself since 1892. The concept was adopted by many English-speaking countries because LLCs have some advantages over corporations. It is sometimes said that an LLC is "kind of a 'light' version of an Inc. or Ltd." This is a generalisation, however, and may be misleading or wrong in some cases. Gesellschaft mit beschränkter Haftung (GmbH) is a type of business structure in Germany, Austria and Switzerland similar to a limited liability company (LLC) in the United States. ...
1892 was a leap year starting on Friday (see link for calendar). ...
A corporation is a legal entity (distinct from a natural person) that often has similar rights in law to those of a Civil law systems may refer to corporations as moral persons; they may also go by the name AS (anonymous society) or something similar, depending on language (see below). ...
A limited company is a company whose practices are limited by English law. ...
Basically, an LLC allows for the flexibility of a partnership structure within the framework of limited liability, such as that granted to corporations. Another advantage of an LLC over a limited partnership is that the formalities required for creating and registering LLCs are much simpler than the requirements most states place on forming and operating corporations; because of the lack of requirement for annual meetings of shareholders (LLCs have "members") or bylaws, for instance - however, most LLCs will choose to adopt an Operating Agreement or Limited Liability Company Agreement to provide for the governance of the Company, and such Agreement is generally more complex than a corporation's bylaws. In the common law, a partnership is a type of business entity in which partners share with each other the profits or losses of the business undertaking in which they have all invested. ...
Limited liability (LL) is liability that is limited to a partner or investors investment. ...
A corporation is a legal entity (distinct from a natural person) that often has similar rights in law to those of a Civil law systems may refer to corporations as moral persons; they may also go by the name AS (anonymous society) or something similar, depending on language (see below). ...
The primary reason that most businesses choose to be organized as an LLC is to avoid "double taxation." A traditional corporation is taxed on its income, and then when the profits are distributed to the owners of the corporation (i.e., the shareholders), then those dividends are also taxed. With an LLC, income of the LLC is not taxed, but each owner of the LLC (i.e., each member) is taxed based on its pro rata allocable portion of the LLC's taxable income, regardless of whether any distributions to the members are made. This single level of taxation can lead to significant savings over the corporate form. Similarly, under some circumstances, members of an LLC may deduct losses of the LLC on their personal tax returns.
LLC v. LLP A limited liability company (LLC) differs from a limited liability partnership (LLP) in that the LLP has the organizational flexibility of a partnership. Furthermore, LLCs are more likely to be subject to a state's franchise taxes. Limited liability partnerships (LLP) are a form of business organization. ...
LLC vs. Inc. & Ltd.
Advantages of an LLC - No requirement of an annual general meeting for shareholders
- Pass-through taxation (i.e. no double taxation).
- Unlike Subchapter S Corporations, pass-through taxation applies even with entities (rather than individuals) as members, and the number of members is not limited.
- Limited liability (meaning that the owners of the LLC, called "members," are protected from liabiliy for acts and debts of the LLC)
- Profits taxed personally (at the member level, not at the LLC level).
- Can be set up with just one natural person involved (in most states), contact your state's Secretary of State, local chamber of commerce or SBA office to get more information.
Subchapter S (S Corporation) A form of corporation that meets the IRS requirements to be taxed under Subchapter S of the Internal Revenue Code. ...
Disadvantages of an LLC - It may be more difficult to raise capital for a LLC, as investors may be more comfortable investing funds in the better-understood corporate form with a view toward an eventual initial public offering.
- The possible lack of any operating agreement requirement can cause problems
- Short life span. Average life span of a LLC is 30 years because of death of one of the owners. In some cases this rule can be bypassed if there is a consensus among all the other members. (Most states now allow LLCs to have perpetual duration (like corporations) and LLCs are generally not dissolved as a result of the withdrawal of any one member).
- Some people, such as new businessmen or low-level clerks, may not be familiar with the LLC structure and may demand actions by Directors or by Shareholders or officers. While an LLC may establish something akin to a board of directors and can designate officers, it is not required to do so. Thus, a low level clerk's insistence on a signature of a President may require an LLC to appoint a President in order to get around the red tape.
In the world - In Italy, a limited liability company is called a Società a responsabilità limitata or S.r.l.
- In most German speaking countries, the closest thing to a limited liability company is a Gesellschaft mit beschränkter Haftung, often shorthanded as GmbH.
- In France, a S.A.R.L. (Société à Responsabilité Limitée) is the closest thing to a LLC. However, in most cases a S.A.R.L does not enjoy pass-though taxation.
Gesellschaft mit beschränkter Haftung (GmbH) is a type of business structure in Germany, Austria and Switzerland similar to a limited liability company (LLC) in the United States. ...
See also This is a list of types of companies, i. ...
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