An LLC is a limited liability company. This type of business structure is a hybrid between a corporation and a partnership. LLCs have the corporate benefit of limited liability, meaning that the owners are not personally liable for the debts and liabilities of the business. They also have the partnership benefit of pass-through taxation, meaning that the business itself is not taxed on its income; instead, the owners are taxed on their share of the profits.
LLCs are relatively easy to form and maintain, and they offer flexibility in how the business can be structured and governed. For these reasons, they are a popular choice for small businesses and startups.
There are a few things to keep in mind when forming an LLC:
- You will need to file paperwork with your state government in order to establish the LLC.
- You will need to choose a name for your LLC, which must be available for use in your state and must meet certain requirements (e.g., it cannot be too similar to an existing company’s name).
- You will need to choose a registered agent for your LLC, who will receive legal documents on behalf of the company.
- You will need to create an Operating Agreement, which outlines the rules and regulations for running the LLC.
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