Limited Liability Company (LLC)

LLC Structure
An LLC is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.

Formation is more complex and formal than that of a general partnership. The owners are members, and the duration of the LLC is usually determined when the organization papers are filed. The time limit can be continued if desired by a vote of the members at the time of expiration.

Advantages of an LLC
  • Legal entity separate from individuals
  • Limited personal liability
  • Continuity of existence
  • Continuity of management
  • Easier to raise capital
  • Incentive to key employees
  • Readily transferable interests
  • Possible separation of ownership and management
Disadvantages of an LLC
  • Difficult, costly formation
  • Subject to close government regulation
  • Scope limited by company charter
  • Inflexibility of operations