LLC DefinitionLLC Definition:
An LLC has characteristics of a corporation, but it is not. It does offer some of the benefits of a corporation, particularly the limitation of an owner's liability. An LLC provides lawsuit protection, credibility, tax savings, deductible employee benefits, asset protection, anonymity, the ease of raising capital, creating a separate legal entity for personal protection, an LLC has a broad range of powers beyond that of a sole proprietorship, small claims court benefits, separate liability for corporate debts, and perpetual duration. When you form an LLC you create a separate legal person and you are a shareholder. LLCs are preferred because they combine the limited liability protection of a corporation and the pass through taxation of a or partnership
. The downside to an LLC is that it does not offer the free transferability of ownership, perpetual existence, and the ability to be owned by a single individual.
What is an LLC’s structure? What is an LLC’s requirement? A limited liability company can have as many members as it wishes to have. The laws of each state even allow LLCs with only one owner called “single member”. Forming one does not require the need for bylaws, meetings and the meetings’ recording just like in a corporation. Instead, an Articles of Organization should be filed with the Secretary of State in order for the LLC to be set up. This Articles of Organization should be according the state’s particular guidelines. Along with this, pertinent fees should also be paid. This process makes an LLC a statutory creation.
LLC Definition History
What is an LLC’s history? When did it come about? LLCs can be considered to be new in the United States’ business scene since its popularity only came about in the 1990s. However, LLCs already existed in Europe way before that. It was formally adopted in Wyoming’s legislature in 1977. It was already in 1982 that a second state in the USA, in Florida, that an act of LLC was enacted. Acceptance was not immediate, in fact slow. It however snowballed in the 1990s when all states passed statutes allowing the formation of LLCs.
Form an LLC
Form a limited liability company online. Learn more about the tax benefits of forming an LLC.