|
|
|
|
What are limited liability companies?
Available for use in most states, the limited liability company ("LLC") is a relatively new form of entity that combines the advantage of a partnership with the advantage of a corporation's limited shareholder liability, even if the owners participate in the management of the company. LLC's enjoy the following advantages:
Limited liability protection,
No restriction on the number or nature of shareholders,
"Pass through" of entity losses to investors (that is, profits and losses are passed on to partners without being taxed),
Avoidance of two levels of taxation,
Flexibility in design of structure, and
Easy removal of assets from the business.
Conversely, LLC's have the following drawbacks:
Not every state has an LLC Act,
The operating agreement must be carefully drafted,
At-risk limitation, basis limitation on losses, passive loss limitations and investment interest limitations are all in effect,
Individual alternative minimum tax consequences may arise,
It can be more difficult to make a public offering than with a corporation.
|
|
|
|
|
|
|
|
|
|
|
FREE CASE REVIEW |
|
|
 |
|
|
|
|
|
|
|
|
|
|
|
|
State Law Center
|
Legal Resource Directory
|
Legal Articles
|
Insurance Advice and Quotes
|
FreeAdvice Answers
|
Community Forums
