An LLC, also known as a Limited Liability Company, provides a flexible compromise between a general business form and a corporation. It's one of the most adaptable of the business forms recognized in the United States, and it is one of the most popular for small business owners.

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An LLC company can either be made up of a single individual, a partnership, a group of individuals, or a corporation. Regardless of the number involved, it generally receives pass-through taxation rates as well as limited liability. The owners of the LLC can choose to apply for different taxation schemes, depending on their preference. All requests must be made to the IRS, and they cannot be altered until the IRS gives a formal approval. The default taxation for an LLC depends on how it's structured. Most of the time, the base group form decides the default taxation. In other words, if an individual forms an LLC, it's taxed as a sole proprietorship. If a partnership forms an LLC, it's taxed as a partnership. If a corporation forms an LLC, it's taxed as a corporation.

LLCs have to follow most of the requirements for a corporation including maintaining separate business accounts from personal accounts, and keeping up with record-keeping and appropriate license filing. These requirements are laid out by state law. So long as they are met, the LLC members maintain limited liability. This means that even if the LLC goes bankrupt, the creditors can only reach the business assets instead of the owners' personal assets. This provides a significant incentive for individuals in partnerships or sole proprietorships since they have unlimited liability. This protection can be lost, though, if the business owners act irresponsibly, illegally, or unethically in certain cases that must be proved in a court of law or an out-of-court settlement. For many businesses, though, the benefits and flexibility make it a better choice than other business forms.

You can form your LLC today, and we’ll take care of the paperwork. If you'd like to learn more about what it takes to form an LLC, visit our LLC Map for a breakdown of what's needed to file across all fifty states and the District of Columbia.

Get started Start Your LLC Answer some questions. We’ll take care of the rest.

Get started Start Your LLC Answer some questions. We’ll take care of the rest.