Not yet registered? Create a OverBlog!

Create my blog

What is a LLC?

When a person decides that they want to become self-employed and form a business, they must decide on the kind of business structure they want. Some of the most well known business structures are a sole-proprietorship, partnership, or a corporation, but LLCs are increasing in popularity. A LLC is also known as a limited liability company, and it’s a cross between a corporation and a partnership.

Advantages of a Limited Liability Company

A limited liability company is sometimes viewed by many people as a combination between a corporation and a partnership. Membership
The owners of a limited liability company are not considered to be partners or shareholders - they are considered to be members. A limited liability company can have an unlimited number of members, and the members can be individuals, corporations, or other limited liability companies.
Tax advantage
As a limited liability company, any losses, profits, or expenses go to each individual member of the company. So a member of a limited liability company will avoid paying taxes twice - he/she will be exempt from corporation tax and individual tax.
Profit distribution
Limited liability companies have the flexibility in that they can distribute their profits among members as per their own regulations, without having to abide by the rules of any external organisations.
Whereas a partnership or other companies have to distribute their profits 50/50, a limited liability company has the flexibility to distribute profits in any way they would like to, as long as the members agree to the profit distribution.

Disadvantages

Life expectancy
Limited liability companies do not stay around forever, because when a member of a limited liability company passes away or files for bankruptcy, the limited liability company is dissolved. Other business structures can live and stay around forever. Complexity
Forming a business structure such as a partnership or sole proprietorship, has less paper work involved than a limited liability company. To form a limited liability company, there are articles of organisation and an operating agreement that needs to be drawn-up and filed. These documents can be drawn-up by a lawyer or any member of a limited liability company. State rules
A person thinking about starting a limited liability company should conduct further research, because most states have their own rules regarding formation of a limited liability company.

Same category articles Consumer culture

How to make the most of a public auto auction

How to make the most of a public auto auction

Public car auctions and auto auctions are great places to pick up deals on used cars. Automotive auctions occasionally get a bit of a bad reputation because of the hussle and bussle and the tendency to meet a lot of aggressive traders trying to get the best deals. However, if you follow some simple steps that this article outlines, you should give yourself a good chance of surviving.
How to pay off credit card debt?

How to pay off credit card debt?

Credit card debt can be eliminated quickly using financial tools such as a debt planner. This article looks at a debt reduction plan to clear credit card debt, which could mean the start of a debt free life.
About the Department of Trade and Industry

About the Department of Trade and Industry

The Department of Trade and Industry - also referred to as DTI - was a UK government department up until June 2007. It was then replaced by the creation of the Department for Business, Enterprise and Regulatory Reform and the Department of Innovation,, Universities and Skills. However, essentially the department has a new title but does much the same work.