What You Need To Know About Limited Liability Company

An Introduction

A limited liability company has the postfix L.L.C. or LLC appended to its name. L.L.C. or LLC stands for Limited Liability Company. A limited liability company is a business organization, which is somewhat similar to that of a corporation, but which offers more flexibility to its owners. The limited liability concept is suitable for smaller companies in which the number of owners is very limited. In limited liability companies, a company shareholder's financial liability towards the company is limited to a certain fixed sum.

In a limited liability company, a shareholder is not personally liable for any of the debts accrued by the company. The legal enforcement of liabilities for shareholders from the point of view of financial accounting is not necessary. A shareholder is a member of the company, and holds stock (known alternatively as shares) of the company. The limited liability company may have multiple members. All the members of an LLC company are owners of their LLC. Their ownership of the company and consequently their liability towards the company is limited to the extent of the face value of the company stock that these members or shareholders or stockholders or owners hold in the company, nothing more and nothing less.

Management structure of LLC companies

LLC.s are organized in accordance with a document, which is known as the rules of the organization or the articles of organization, which operates on the common agreement specified by its members only. This operating agreement is a contact that is made among the LLC governing members and the members of the LLC. This is basically a guideline for the operation of the company and the distribution of the income among its members of the company.

The managing members of the LLC can be either members of the company or alternatively even experienced and professionally qualified non-members, who are eligible to hold the responsibility of the maintenance, management, affairs, and the administration of the LLC. In most LLCs, managing members serve only for a specified short time. The specific duties of managing members are detailed in the Article of Organization. In some US states, members are being chosen as the managers of the LLC, whereas in some other US states, even non-members are chosen as managers of the LLC. However, the eligibility criteria to become manager of LLCs, need to be specified in the articles of organization of the particular LLC.

How much does it cost to form an LLC?

Days ago I came across an article that provide useful advice for you to save your money when filing for a Texas LLC.

Operating a limited liability company does not mean that the appropriate US federal partnership tax forms are not necessary. But the payment of tax is not at all complex. All reports of the income and the deduction that are attributed to each and every member of the LLC are reported on that owner's tax return. If an LLC is owned by a single corporate member, such an LLC would be treated as a disregarded entity. In the case of single-member LLCs, one has to report its income and deductions in the corporate tax return, which results in double taxation.

Source: collected from the Internet.