Limited Liability Company LLC Questions Q. What is an LLC or limited liability company ? What are the LLC advantages?
A. A limited liability company or LLC is a distinct business entity that offers an alternative to partnerships and corporations by combining the advantages of each: Many small business owners and entrepreneurs prefer LLC’s because: 1) it can have the “pass through” taxation of a sole proprietorship, partnership or S-Corp. This means that earnings of an LLC are taxed only once, and (2) LLC’s have limited liability protection like the shareholders of a corporation. The LLC owner’s liability is generally limited to the amount of money which the person has invested in the LLC. In a partnership or sole proprietorship, the owners personal assets may be seized to pay the debt of the business) LLC’s have additional advantages over corporations: Like general partnerships, LLC’s are generally free to establish any organizational structure agreed on by the members. For example, profit interests may be separated from voting interests.
