Limited liability companies or LLC are new form of business which has developed over past few years. These companies are neither corporations nor partnerships; they combine the benefits of both. People who run limited liability companies are known as members instead of shareholders or partners. The laws or legal formalities related to limited liabilities companies vary from one state to another.
To start these companies one or more members are required. They need to fill forms with the Secretary of State. They also need to pay some amount of fees. The management of limited liability companies is decided by the members. Like other forms of companies Limited Liability Companies also function on the principle of democracy, allowing each member equal share of votes.
If you want to start a short-term company then Limited Liability Company or LLC is a perfect option as it offers several advantages to the owners.
How Limited liability companies are beneficial?
Flexible profit distribution – One of the best things about limited liability companies is that they have several ways of distributing profits. Generally, standard companies have fixed way of distributing profits but limited liability companies are more flexible in nature.
Limited liability – One of the best things about limited liability companies is that the owners have the liability protection. This means that the owners or members cannot be held responsible for the company’s debts unless they have personally agreed on the debts.
Flow through taxation – This feature of limited liability companies allows you to avoid paying double taxation by paying individual as well as corporate tax.
No fixed minutes – Generally, all the corporations and companies need to have meetings and formal minutes of the meetings. This is not the case with limited liability companies as they no corporate minutes are involved.
Thus, limited liability companies are perfect for any kind of businesses.