Limited Liability Company is the acronym for LLC. The most appealing feature of an LLC is that it protects the assets of its owners and members.
What is the best option for your business – a Limited Liability Company? We’ll explore the pros and cons of each business structure so that you can make an informed decision.
What is an LLC and how does it work?
The limited liability company can have one owner (a sole proprietorship), two owners (a partnership), many members, or dozens of them. What is an LLC operating contract?
The management structure offers a variety of options. By having voting rights, all members can play a part in the management. Voting rights can be “weighted”, or given more weight, based on the percentage ownership a member holds in the company.
Limited Liability Company memberships are transferable. Profits and losses are shared by the members; in a partnership it is also shared by the partners.
Owners can decide whether to tax as a S Corp or a partnership, depending on which is more advantageous.
These types of decisions can be found in two important documents: the articles of organization and the operating agreement. In the articles of organization, it is stated who each person is and their role. The operating agreement outlines the business structure and the steps to transfer memberships. It also explains how the Limited Liability Company is managed.
