What is an LLC?

An LLC, or Limited Liability Company, is a business structure in the USA that combines the limited liability protection of a corporation with the flexibility and tax benefits of a partnership. Here are some key points about an LLC:

- **Limited Liability**: Owners of an LLC are not personally liable for the company's debts or legal liabilities. This means their personal assets are protected in case the business faces financial trouble.

- **Pass-Through Taxation**: Unlike a corporation, an LLC is not taxed as a separate entity. Instead, profits and losses are passed through to the owners' personal tax returns, avoiding double taxation.

- **Flexibility**: LLCs offer flexibility in management structure, ownership, and profit-sharing arrangements. They can be managed by the owners themselves (member-managed) or by appointed managers (manager-managed).

- **Easy Formation**: Forming an LLC involves filing articles of organization with the state and creating an operating agreement outlining how the business will be run. Requirements vary by state.

- **Perpetual Existence**: An LLC can continue to exist even if the original owners leave or pass away, providing continuity and stability for the business.

- **Credibility**: Operating as an LLC can enhance the credibility of a business, as it signals a formal and legally recognized structure.

Overall, an LLC is a popular choice for small businesses and startups due to its simplicity, flexibility, and liability protection.