1. Limited Liability Company (LLC)
Posted: Sun Feb 02, 2025 10:55 am
The Limited Liability Company (LLC) is the favorite of many, protecting personal assets from business debts. Whether flying solo or having partners, an LLC is flexible and relatively easy to set up.
An LLC (Limited Liability Company) is known as a ‘pass-through’ entity because the profits of an LLC flow directly to the managers/members.
This business structure is quickly becoming the most common form of incorporation. LLCs have a relatively flexible structure that provides many benefits of a partnership or sole proprietorship, lebanon rcs data with some of the protections provided by C corps and S corps (more on those business structures below). They do not require many formal processes required by other types of corporations.
However, LLCs cannot offer stock to the public, have some ongoing annual filing requirements, and are still required to keep internal paperwork.
Importantly, people who ignore the requirements of operating an LLC can lose their personal liability protection in a process called /piercing the corporate veil’. If this happens, business owners can retroactively be held liable to pay corporate debts with personal funds.
I’ve personally used this type of structure across many new startups (except for companies that I knew would require outside funding—for those, I used a C Corp structure). LLCs are simple to create, have minimal state requirements, and offer flexibility.
An LLC (Limited Liability Company) is known as a ‘pass-through’ entity because the profits of an LLC flow directly to the managers/members.
This business structure is quickly becoming the most common form of incorporation. LLCs have a relatively flexible structure that provides many benefits of a partnership or sole proprietorship, lebanon rcs data with some of the protections provided by C corps and S corps (more on those business structures below). They do not require many formal processes required by other types of corporations.
However, LLCs cannot offer stock to the public, have some ongoing annual filing requirements, and are still required to keep internal paperwork.
Importantly, people who ignore the requirements of operating an LLC can lose their personal liability protection in a process called /piercing the corporate veil’. If this happens, business owners can retroactively be held liable to pay corporate debts with personal funds.
I’ve personally used this type of structure across many new startups (except for companies that I knew would require outside funding—for those, I used a C Corp structure). LLCs are simple to create, have minimal state requirements, and offer flexibility.