New Investor's Guide to Limited Liability Companies

Understanding LLCs and Why They Are Important to Your Investments

Many investors have never owned a stock or bond but instead have most of their net worth tied up in a family business or startup.  In the past twenty years, Limited Liability Companies, or LLCs, have become one of the most popular ways to hold ownership stakes in these types of businesses.  Their unique benefits and protections afforded to the LLCs owners make it easy to understand why they are so highly favored.  It is important for you, as a new investor, to understand how they work, why you should care about LLCs and some of the tax implications.  This collection of LLC articles, including Limited Liability Limited Partnerships which are a relatively new legal entity that combines aspects of a limited partnership with a limited liability company, will explain the basics to you so you can educate yourself before meeting with a qualified professional.

Limited Liability Companies for Beginners

Limited Liability Companies or LLCs for Beginners

A limited liability company, or LLC as it is often known, is a type of business that combines the benefits of a corporation with the benefits of a limited partnership.  The most notable advantages include pass-through taxation, asset protection, limited compliance rules, and less rigid structures for management.  If LLCs have sparked your interest, take some time to read over this list of important pros, cons, and considerations before deciding to buy equity in one or form your own. More

LLC Operating Agreements for Beginners

LLC Operating Agreements

All limited liability operating companies, or LLCs, are supposed to be governed by a contract that the investors sign amongst themselves prior to the company's formation.  This contract is known as an LLC operating agreement and provides vital information to the company's policies, priorities, and procedures, and is required by many states to be presented with their application for incorporation.  Here are just a few of the most important provisions you are likely to see in a standard LLC operating agreement. More

Why So Many Investors Love Nevada LLCs

Nevada LLC
With a Nevada LLC, it is possible to have your cake and eat it too as a result of a list of benefits that include asset secrecy, no state taxes, easy formation, and much more!.

Over the past twenty years, the state of Nevada has been working hard to attract businesses and corporations to incorporate within its borders and set up shop.  Its pro-business campaign was a success.  A lot of lawyers and financial advisers now espouse the benefits of using a so-called Nevada LLC to hold family businesses, investments, or other assets.  These benefits include asset privacy, favorable tax laws, shareholder anonymity, and much more.  Learn more about Nevada LLCs in this article. More

The Beginner's Guide to Delaware LLCs

The Beginner's Guide to Delaware LLCs

A Delaware LLC offers would-be business owners a lot of advantages such as low or no taxes, asset privacy, low annual filing expenses, easy start-up processes, and asset protection from creditors.  In fact, investing through a Delaware LLC is often a top choice of many professionals, and was long before Nevada changed its laws to compete with them.  Here are just a few reasons you may want to consider incorporate your business or holding your investments through one of these entities. More

How Families Can Invest Together with an LLC

Families Can Invest Together with an LLC

To take advantage of economies of scale, families will often pool their money together to form small businesses, invest in shares of stock, bonds, or mutual funds, develop real estate, or any other business or investment venture.  How these family LLCs operate will be defined in their operating agreement.  Walton Enterprises, LLC, for example, is a famous family limited liability company through which members of Sam Walton's family control Wal-Mart Stores, Inc., a regional bank named Arvest, and other investments.  Discover how family limited liability companies can work for you. More

Top 6 Reasons to Form a Limited Partnership

Top Reasons to Form a Limited Partnership
Top Reasons to Form a Limited Partnership. Doug Chinnery, Getty Images

To help make limited partnerships as appealing and useful as limited liability companies, roughly half of the states in the United States have allowed for the creation of a new type of entity known as a limited liability limited partnership or LLLP.  It functions similarly to an LLC but has its own unique advantages and disadvantages.  How does this new legal entity work and is it right for your family business or investments? More