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What is an LLC?
What is an LLC? A great choice for the small-scale business owner!
The LLC (Limited Liability Company) was created to suit the small-scale business owner. Many enterprises start out as basic partnerships. As time goes by, it is common for the business owner to realise the many benefits that comes with incorporation, but since incorporation can be difficult and expensive, as well as create a lot of paper work and change the overall tax and maintenance structure of a company, it is not hard to understand if the small business owner to refrains from incorporating even though he or she would benefit from it. This is where the LLC comes in. The LLC was designed to provide the small scale business owner a way of enjoying the benefits of incorporation without having to sacrifice the flexibility and low-maintenance of a common partnership. This does not mean that LLC is for small companies only – there are no limitations regarding the size of the enterprise, nor regarding the amount of members (owners). What is an LLC? A flexible entity that comes with a minimal amount of paper work!
What is an LLC? A way of protecting your personal assets!
Generally speaking, the member of an LLC will only have a limited liability. This means that you will only have a limited liability for debts acquired and actions carried out by the LLC. If you stay in a partnership instead of forming an LLC or corporation, you may loose everything you own, including your house and your car, if something goes wrong, e.g. if you companies gets sued or there is a shift in the market that renders you without business. What is an LLC? An appreciated way of safeguarding personal assets!
What is an LLC? An easy way of distributing profits!
If you form a C Corporation, profits and debts must always be distributed proportionally among the shareholders in accordance to how many shares they hold and the status of their shares. If you break this general rule, the result is severe tax repercussions because the “additional gain” that certain shareholders receive will be taxed heavily. If you instead form an LLC, the members of the LLC are free to distribute profits and debts in accordance to their own liking. A disproportional allocation of profits and debts will not be punished by an altered tax treatment. You can achieve this by forming an S Corporation as well, but an S Corporation can only have a limited number of shareholders and you will be forced to relinquish power to a board of directors.
What is an LLC? An entity without citizenship requirements!
In the United States, many business entities can only be formed by U.S. citizens. The LLC is an important exception to his general rule and you can establish an LLC even if you do not have a U.S. citizenship. Forming a LLC is also a great choice for U.S. citizens that wish to be able to let people with other citizenships become members of their LLC. | 
