1. Limited Liability Corporation (LLC) is a type of business structure that offers the limited liability benefits of a corporation and the flexibility of a partnership.
2. LLCs are formed by filing the necessary paperwork with the state government, usually with the Secretary of State's office.
3. The owners of an LLC are called members, and they can be individuals, corporations, or other LLCs.
4. One of the key advantages of an LLC is that the members' personal assets are typically protected from the company's liabilities. This means that members are not usually personally responsible for the company's debts or legal obligations.
5. LLCs are considered a separate legal entity from its members. This means that an LLC can enter into contracts, own property, and conduct business in its own name.
6. Unlike corporations, which have a mandatory management structure, LLCs can be managed either by their members (referred to as member-managed) or by appointed managers (referred to as manager-managed).
7. LLCs are generally not subject to double taxation. The business's income and losses "pass through" to the members, and they report them on their individual tax returns. This avoids the need for the company to pay corporate taxes, as is the case with C corporations.
8. Some states may require LLCs to have a specific or similar suffix, such as "LLC," "Limited Liability Co.," or "Ltd. Liability Company," as part of their legal name.
9. LLCs can have an unlimited number of members, and there are no residency restrictions for forming or owning an LLC.
10. The governance, operating agreements, and dissolution procedures for an LLC are usually outlined in an operating agreement, which is a legal document that sets out the rules and regulations for the company's management and operations.
limited liability corporation facts
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