Types of Entities

Not sure which type of business to set up?

Setting up a new company can be daunting. To get started, review the different formation choices below to see which option is right for your business.

Limited Liability Company (LLC)

Good to Know:

An LLC is a legal entity separate and distinct from its owners, who are called "members." Members of an LLC may include any number of individuals, partnerships, corporations, trusts, nonresident aliens, etc.

Need to Know:

When properly structured under applicable state statutes, LLC members have the same limited liability protection afforded stockholders in C or S corporations.

  • Liability. Absent any specific personal guarantees, the amount at risk for members is limited to their investment in the LLC. Their personal assets are generally beyond the reach of creditors. This protection is enjoyed by all members, unlike a limited partnership which requires one general partner to remain liable for partnership debts. And, unlike limited partners, LLC members may be active in company management without risking their limited liability status.
  • Tax benefits. LLC members may also enjoy the same flow-through tax benefits which are applicable to partners of a partnership.
  • Stock distributions. Unlike S Corporations, LLCs may (and typically do) base profit distributions and allocations on member contributions, rather than on a per capita basis.

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