Limited Liability Company

A limited liability company (LLC) is the most flexible of all business entities.
Created 25 years ago, this kind of business entity combines the limited liability of a corporation with the governance, ownership, and tax treatment flexibility of a partnership.
The benefits of limited liability companies
  • Governance: With a limited liability company, you’re not bound by the statutory obligations of a corporation. Anything that you and the other members of the LLC agree to is fine; corporations have more rigid rules.
  • Ownership:  While the tax treatment of an LLC is the same as for an S corporation, there are narrow restrictions on who can own S corporation shares. LLCs, on the other hand, offer virtually no restrictions on ownership, giving parties the freedom to seek alternative sources of capital for their business.
  • Tax treatment: LLCs are taxed as a partnership, which means that the profits and losses of the entity pass through directly to the owners, and the entity itself does not pay any tax.
A limited liability company is the preferred business entity for most situations. It has no size restrictions—it can range from a single proprietor to 50,000 members. LLCs can also be legally traded on the public stock exchange. In addition, LLCs can have different classes of equity, allowing you to raise money more easily.
Business attorney Steve Sneiderman can help you form your limited liability company. Contact him today to get started.