All About Limited Liability Companies (LLCs)

What You Need to Know about LLC Formation, Taxation, and More

Limited Liability Companies (LLCs) have been available to business owners since the early 1980s, and they are an alternative form of business which offers some benefits. Learn about LLC taxation, some common myths about LLCs, and other information to help you make a decision about forming an LLC.

1
What is a Limited Liability Company (LLC)?

Limited Liability Company
What is a Limited Liability Company. Peathegee Inc/Getty Images

A Limited Liability Company (sometimes confusingly called a "Limited Liability Corporation" is a business entity recognized in all U.S. states. An LLC combines benefits of a sole proprietorship and a corporation, because it allows the owner to file a simple tax return like a sole proprietorship or partnership, and also limits the owner's liability like a corporation.  More

2
What is a Member of an LLC?

Owners of an LLC are called "members," similar to the term "partners" for owners of a partnership. Members are like partners, but there are some differences.  One person can own an LLC (called a single-member LLC), or the LLC can be owned by two or more people.  More

3
What is the Difference Between an LLC and a Corporation?

There is a lot of confusion out there about LLCs and corporations; in fact, sometimes LLCs are mistakenly referred to as "Limited Liability Corporations." But an LLC is not a corporation; the two business types have totally different ownership structures and forms. 

An LLC is simpler to form than a corporation ​because no by-laws or corporate charter is required. But that doesn't mean that the LLC isn't carefully watched by state and federal agencies to make sure it is being operated separately from the owners' personal financial and tax lives. More

4
Two Types of LLC's - the Domestic LLC vs. the Foreign LLC - Explained

If you form an LLC in a state, you are by default forming a domestic LLC. But what if your LLC does business in several states? Then you'll want to know about the foreign LLC.  More

5
How Do I Start a Limited Liability Company?

Here are the steps involved in starting an LLC, including applying for an Employer ID number, creating an Operating Agreement, and other paperwork and decisions you will need to make. More

6
What Taxes Does a Limited Liability Company Pay?

LLC's must pay the same taxes as other types of businesses,including income taxes, sales taxes, and property taxes. The LLC owners (members) must pay income taxes on the profits of the business. This article provides more details on all the types of taxes an LLC business must pay.  More

7
Tax Advantages and Disadvantages of the LLC

An LLC is not a taxing entity, so it pays income taxes depending on the number of members. The LLC has tax advantages and disadvantages compared to other business types, particularly corporations.  More

8
Dispelling Myths about Limited Liability Companies

Since LLCs are fairly new in the business world, there is still a lot of confusion about them. Many business experts and attorneys shy away from the LLC form because of these mistaken beliefs. Here are the top 5 myths about LLC's and the truth. More