Limited Liability Company - LLC

A newer structure of business formation, LLCs are a very popular hybrid form of business structure. That is to say they combine the best characteristics of the other business structures. Owners have the limited liability of a corporation along with the pass through taxation of a partnership. A popular choice for sole proprietors (an LLC can be owned by one or many) who are looking to incorporate simply to protect personal assets or to secure loans and at the same time add credibility to their business. The LLC is widely held to be the easiest and least expensive form of ownership structure, save for the sole proprietorship. LLCs are gaining popularity in all segments of small business because they do combine the advantages of a corporation with the tax advantages and management flexibility of a partnership.

The main advantages of forming an LLC are;

• The limited liability for business debts and lawsuits
• No threat of double taxation since the LLC is not considered to be a separate entity from it’s owner(s)
• Allocation of profits and losses need not be proportional to ownership interest

This information is for general informational purposes only and not a substitute for advice from a Tax professional and or an Attorney. Michigan Incorporation Company is a service company and does not offer legal or financial advice.

Note: There is never limited liability no matter which business structure is chosen for personally guaranteed loans or commitments. Also business owners are ultimately personally responsible for unpaid federal, state, and local employment taxes, seek out an accountant’s or payroll specialist’s advice if you plan on having employees or must take payroll yourself.

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