Limited Liability Corporation: Do One And Save Your Wealth!
When the name of a company ends with L.L.C/LLC, it is a legal form of business which is incorporated as a company and offers restricted liability to its members. Limited liability means that a person investing in the business can face a loss which is upto a maximum of the net worth of the company at that point of time.
Incorporation LLC vs other types of incorporation
The beauty of an incorporation LLC vs other types of companies is that, in case of losses incurred by the company or when the company is being wound up, unlike for the sole trader and partnership, the personal belongings of the investor are not called upon in case where the assets of the company are fewer than its liabilities.
Types of LLC
Thus the above type of incorporation is the safest way to invest your money and is preferred all over the world. A Limited Liability Company can further be divided into two (2) categories.
*Corporation Limited by Shares
*Corporation Limited by Guarantee
Limited Liability Corporation has several characteristics which are enlisted below to give you a more detailed knowledge of LLC information:
*Owners of the LLC are called members
*Number of members in an LLC is unlimited
*Members may be individuals, corporations, or other LLCs
Advantages of a Limited Liability Company
The primary advantage of incorporation LLC is the protection given to its members at the time of bankruptcy. Other advantages are listed below:
*It is a separate legal entity from its members
*An incorporation LLCs members cannot be held personally liable
*Limited Liability Companies can adopt various forms of distribution of profit
*The LLC business structure requires no corporate minutes or resolutions and is easier to operate
*The members of LLC avoid double taxation on their income
*There is no intervening structure in a limited liability corporation.
*Limited Liability Corporations have more flexible profit distribution methods.
*There is no curtailing of investment and number of members
*The entire structure is comparatively informal, ensuring the smooth and easier running of the business
*Setting up a Limited Liability Company is simpler and quicker
*No loss of power to board of directors (BOD) based on number of members.
Forming a LLC? Be aware of the laws! The important factor to be considered when forming a L.L.C/LLC is that this is a relatively newer form of business available to you. As a result of this most of the countries have different rules and regulations for setting up LLCs.
Before setting up an LLC for yourself you should be aware of the laws applicable in the jurisdiction where it is being setup. Please seek out legal advice or advice from professional accountants.
When looking for a lawyer, ensure that he or she has knowledge of and experience in setting up a limited liability company under the particular laws of the state or country jurisdiction where you intend registering your company.
About the Author
Ramapati Singhania specializes in creating and managing web businesses. His latest website http://www.incorporation-offshore-saves-wealth.com focuses on helping you to incorporate offshore companies in Seychelles, Mauritius and BVI. You can also visit his blog, http://www.ramapatisinghania.com